In a way, Africa is a new frontier for mobile services. The continent is seeing growth from the commodities boom. Plus, there is certainly a need to build up the infrastructure.
No doubt, Vodafone Group plc (NYSE: VOD) sees the opportunity. In fact, this week the company plunked down $900 million for a 70% stake in Ghana Telecom (the remaining 30% will be held by the government).
Actually, Ghana Telecom is the main player in the market, with 99% of the fixed-line segment. There is also a 90% control of the broadband category.
However, as for its mobile, Ghana Telecom is ranked #3 (behind MTN Group Ltd. and Millicom International Cellular SA). There are roughly 1.4 million customers.
But, with the help of Vodafone -- which plans to invest $500 million in Ghana Telecom -- there should be a ramp in growth in mobile (the goal is to reach a 25% marketshare). Keep in mind that only about 35% of Ghana's citizens have mobile phones (the population is 24 million).
Yet, this is not a done deal. That is, Vodafone needs to get the approval of Ghana's parliament. Obviously, this will be a hot topic for debate – and may result in an even higher price for the transaction.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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