South African mobile communications group Vodacom, in which Telkom has a 50% stake, has signed a five-year management egreement with Econet Wireless Nigeria.
The agreement supersedes an interim agreement that has been in effect since October 2003.
Vodacom said on Thursday that in return for a management fee, a very senior team, led by Willem Swart, newly appointed as CEO at Econet Wireless Nigeria, has started work in Nigeria. Swart was formerly the managing director of Vodacom Congo.
Econet Wireless Nigeria will start trading under the Vodacom brand with immediate effect. In terms of the agreement the Vodacom Group will also provide additional support in respect of procurement, network design and roll-out, products and services, marketing and other group services.
The signing of the agreement follows extensive due diligence by Vodacom over a nine-month period. It represents a key step in the process of Vodacom’s proposed equity investment into the business of Econet Wireless Nigeria, in terms of which Vodacom will take a controlling stake in this business.
Vodacom deputy group CEO Andrew Mthembu said the proposed equity investment process will receive a huge boost from this agreement. The transaction to effect the equity investment still requires finalisation of the commercial terms and the sanction of the courts of Nigeria as well as the Nigerian Communications Commission and the Nigerian Securities and Exchange Commission.
Mthembu stated that the closure of the equity investment process will take time. However, it is likely to be completed within a six to 18 months time frame.
Econet chairperson Oba Otudeko says the agreement will enable Econet Wireless Nigeria to draw from the goodwill and expertise of Vodacom as the leading mobile operator on the continent and boost the Nigerian network operations as well as strengthen it to compete more aggressively.
“Vodacom is particularly proud to be making this announcement on the 10th anniversary of the launch of its commercial service on April 1 1994,” said Mthembu.
He added that the agreement marks the start of the second chapter in the growth of the Vodacom Group, which incorporates the leading mobile network operators in South Africa, Tanzania, the Democratic Republic of Congo and Lesotho.
Vodacom has also recently launched a service in Mozambique and with more than 11-million customers is the largest mobile operator on the African continent.
Econet Wireless Nigeria Limited is the second-largest mobile operator in Nigeria with more than one million customers. — I-Net Bridge