Published: May 22, 2009
Vodacom, the South African mobile phone company, overcame last-minute political obstacles to successfully raise US$3.5bn in its listing on the Johannesburg Stock Exchange on May 18. The company also sold a 15% stake to Vodafone, giving the UK mobile company a 65% controlling stake in the firm.
The listing almost never happened, when the trade union Cosatu tried to block the deal, claiming that the sale to a foreign firm would not be in South Africa's national interests. The country's telecom regulator then tried to block the deal on May 15, although this decision was disallowed by a Pretoria court on May 17, just hours before the listing.
Vodafone bought the 15% stake in the company for US$2.6bn. It says having a controlling stake will streamline decision making, enabling the mobile company to compete more effectively with rivals such as MTN.
Vodacom is South Africa's biggest mobile operator, with 37.8 million subscribers at the end of last year. It also operates in Congo, Lesotho, Mozambique and Tanzania.
The 50% stake in Vodacom purchased by investors and Vodafone was sold by Telkom, the fixed line telecom company that is mainly owned by the South African state. It is also 15% owned by the Elephant Consortium, a black empowerment group, which controversially bought the stake in 2004.
The Elephant Consortium is headed up by Andile Ngcaba, who was previously director-general of communications in the Mbeki government, where he oversaw earlier privatisations of Telkom.
Some analysts suggested the opposition of Cosatu to the deal was revealing of a spat between different clans in the ANC. The Elephant Consortium includes several figures close to former president Thabo Mbeki, while the Cosatu trade union is close to president Jacob Zuma.