Vodafone to boost S African stake

Africa is one of Vodafone's key growth markets

Vodafone is in exclusive talks about a 16bn rand ($2.4bn; £1.35bn) deal to raise its stake in Vodacom, the South African mobile phone operator, to 50%.

Vodafone already owns 35% of Vodacom, which has 14 million customers in South Africa as well as growing interest in a number of other African markets.

The British firm hopes to conclude a deal with investment firm Rembrandt Trust to buy its 15% holding next year.

Vodafone regards Africa and south east Asia as its key growth markets.

Last month Vodafone agreed to buy a 10% stake in Indian firm Bharti Tele-Ventures for £841m.

Potential

Vodacom is South Africa's largest mobile phone provider.

Telkom, the state owned South African telecoms firm, is the company's other leading investor, owning 50% of its shares.

Vodafone said it hoped to conclude negotiations with the Rembrandt Trust - which owns its Vodacom shares through the VenFin investment firm - shortly. The deal would see it paying up to £1.35bn in cash to boost its holding.

The move reflects Vodafone's confidence in the commercial development and future potential of the African telecoms market.

Vodacom saw its customer base grow by almost 40% in the last financial year while its revenues rose 20%.

Its services are currently available to more than 55% of South Africa's 47 million population.

It launched Africa's first 3G service at the end of last year.

The company is also expanding into other African markets and now has three million customers in the Democratic Republic of Congo, Tanzania, Lesotho and Mozambique.