Vodacom and MTN to pay R2.26-billion to take over Nashua Mobile customers

South Africa's Vodacom Group and MTN Group will buy mobile-phone subscribers from Nashua Mobile for R2.26-billion after the service provider deemed its business model unsustainable.

The country's biggest wireless operators will take on customers who signed up to their networks and services through Nashua Mobile, its Johannesburg-based owner Reunert Ltd said in a statement on Monday. Nashua finds South African mobile-phone users packages to suit them from the nation's network operators.

"The boards of Reunert and Nashua Mobile were required to consider the long-term prospects for Nashua Mobile" after a service-provider agreement with Vodacom and incentive deal with MTN expired, Reunert said. "After careful consideration, the boards concluded that it is unlikely that this business would generate acceptable returns."

Domestic voice revenue for South Africa's largest phone companies is being squeezed after the country's communications regulator cut the fees mobile carriers pay competitors to access their networks. Nashua Mobile, which sells products for South Africa's wireless operators, has more than 897 000 contract subscribers and about 700 employees, according to Reunert.

Reunert's shares have declined 1.9% this year to R67.22 a share, while Vodacom, which has the largest number of South African mobile-phone customers, has gained 3.4% to R37.50 through April 11's close.

Nashua Mobile hasn't agreed a deal with closely held Cell C for South Africa's third-biggest mobile subscriber base and is seeking alternatives, according to Reunert. – Bloomberg

Keep the powerful accountable

Subscribe for R30/mth for the first three months. Cancel anytime.

Subscribers get access to all our best journalism, subscriber-only newsletters, events and a weekly cryptic crossword.

Chris Spillane
Chris Spillane works from Barcelona, Spain. ✈ ✈ ✈ ✈ recovering journalist, former @business & @politicoeurope scribbler, views ≠ mine , are we having fun yet? [X] Chris Spillane has over 1885 followers on Twitter.

Related stories

WELCOME TO YOUR M&G

Already a subscriber? Sign in here

Advertising

Latest stories

International Day of Education: Countries set realistic goals for 2030

The original sustainable development goal for education treated all countries as equal; however, global targets have now been localised, providing a more realistic framework

Chieftaincy dispute hits Richards Bay Minerals production

The KZN department of co-operative governance has undertaken to resolve the dispute it created by dethroning the sitting inkosi in 2010

World Economic Forum: ‘2022 will be like navigating an obstacle...

Central banks massively underestimated inflation risks as economies bounced back from the pandemic-induced slump

Montana backs Prasa-fraud accused Mthimkhulu as court hears how he...

Montana testified that ‘unqualified’ Mthimkhulu was the right engineer for the state rail agency, despite his acquisition of allegedly faulty locomotives
Advertising

press releases

Loading latest Press Releases…
×