Vodacom may be in talks about buying a controlling stake in Malawi’s incumbent telecommunications operator, Telekom Networks Malawi (TNM), according to a report by Bloomberg on Monday, citing a report in Malawi’s Daily Times.

TNM is listed on the Malawi stock exchange and issued a cautionary announcement on Friday stating that it had “received an expression of interest from and entered into discussions with a potential strategic equity partner”.

TNM was established in 1995 as a joint venture between Telekom Malaysia and the then government owned Malawi Telecommunications Ltd. At the end of last year, it had 1,1m subscribers, the vast majority of them prepaid users.

The network covers more than 74% of Malawi and offers GSM, GPRS, Edge and 3G network connectivity and services for both the prepaid and postpaid markets.

With a population of more than 15,3m, Malawi had 1,8m mobile phone subscribers in 2008 and an Internet penetration rate of 2,1 users per 100 people.

Vodacom already has operations in a number of Southern African countries, including the Democratic Republic of Congo, Lesotho, Mozambique and Tanzania. It has long been looking for other suitable African markets.

Russell Southwood, head of research at consulting firm Balancing Act Africa, says the deal would be a logical one for Vodacom because it “already has operations in the area” but warns that as TNM is “the former incumbent” Vodacom will have to be cautious as this often means contending with “existing agendas, managing existing staff, productivity levels, and effectiveness in the market”.

Nevertheless, Southwood says an acquisition by Vodacom would be a sensible move because it would expand its footprint in the region.

Johan Dennelind, CEO for Vodacom’s international operations, says “Vodacom is well positioned on the continent but we are keeping our eyes open for sub-Saharan expansion opportunities. We can’t comment with respect to any particular company or country”. — Craig Wilson, TechCentral