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    Home»News»Vodacom said to be mulling bid for Infraco

    Vodacom said to be mulling bid for Infraco

    News By Staff Reporter18 April 2016
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    Shameel Joosub
    Shameel Joosub

    Just when it appeared a sale of state-owned fibre infrastructure provider Broadband Infraco to Telkom was a fait accompli, Vodacom may now intervene and make an offer to buy the financially distressed company.

    According to a report by Bloomberg, an acquisition of Infraco by Vodacom — if it were to happen — would help the mobile operator gain at least some of the infrastructure that it would have received through its now-abandoned R7bn acquisition of Neotel.

    Vodacom CEO Shameel Joosub reportedly told Bloomberg: “When our proposed acquisition of Neotel lapsed earlier this year, we said that our ambition to increase the roll-out of fibre-based broadband services to customers remains.”

    Acquiring an asset like Broadband Infraco would help Vodacom achieve this, he is quoted as having said.

    News of Vodacom’s interest in Broadband Infracom comes just weeks after a report suggested that a merger of Infraco and Telkom, in which government holds a 39,8% direct stake, looked increasingly certain.

    Business Day said Infraco had indicated in its latest annual report, tabled in parliament, that it supported a plan by government to merge it with Telkom.

    It has also reportedly said that it should receive assistance from the state as soon as possible to prevent “further erosion of its value”.

    Infraco lost R245m in the 2015 financial year, compared to a loss of R144m previously. Revenue was just R366, up from R302m.

    In February, telecommunications & postal services minister Siyabonga Cwele said that Infraco and Telkom were in talks about how they could co-operate on infrastructure projects. The rationalisation process was “urgent” for Infraco, Cwele was reported to have said at the time.

    Broadband Infraco, which was the brainchild of former public enterprises minister Alec Erwin, has struggled for years to turn a profit.

    The company was established to create a national telecoms backbone to compete with Telkom, which had a monopoly at the time.

    Government holds a direct 74% stake in Infraco, which owns about 15 000km of fixed-line infrastructure.  — © 2016 NewsCentral Media

    Alec Erwin Broadband Infraco Infraco Shameel Joosub Siyabonga Cwele Telkom Vodacom
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