Vodacom to buy Gateway Telecommunications

South African operator aims to expand into the enterprise and fixed-line sector

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By  Roger Field Published  September 1, 2008

South African mobile operator Vodacom has agreed to acquire the carrier services and business network subsidiaries of Gateway Telecommunications for about $675 million, plus a payment of some $25 million in relation to its high-yield bond.

Gateway is Africa’s largest independent provider of interconnection services via satellite and terrestrial network infrastructure for African and international telecom companies. The company also provides end-to-end connectivity solutions to companies on the continent.

The acquisition is expected to help Vodacom broaden its presence in key markets throughout Africa, especially Nigeria. The deal will also allow the company to roll-out new and existing products and services in Africa, and will give it access to Gateway’s customer base.

Pieter Uys, CEO designate of Vodacom Group, said: “The acquisition of Gateway reflects Vodacom’s strategy to reposition itself as a leading pan-African provider of communications services and to diversify from its current status as primarily a mobile-centric network operator.

“We believe that Gateway’s significant presence across Africa will allow Vodacom to tap into the huge potential for growth in business services and connectivity and will enhance our position with multinational corporations.”

The agreed acquisition is the latest in a series of smaller deals aimed at expanding the company’s business in the enterprise and fixed-line services markets. Most recently, Vodacom acquired 51% of Storage Technologies Services, a South African managed enterprise and data centre services company.

Gateway employs about 350 employees in 17 countries throughout Africa and Europe.

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