Vodafone faces long haul in SA

Vodafone faces long haul in SA
By: Reuters
Arun Sarin, the head of Vodafone Group Plc, is hankering after deals in Africa, but he could be in for a long wait if control of South African joint venture Vodacom remains top of his list.

Sarin, a US citizen expected to return to California one day, said this week he had unfinished business as head of the world's largest mobile phone company.

"If you were to think about the things we have to do in 2008: there are important acquisitions in Asia and Africa that we have to make, we have got further cost reductions to do, we've got more data products to bring to life, we've got a full in-tray," the chief executive said in a televised interview.

"I'm having fun and frankly, this is not the time to say goodbye."

Market enthusiasm for Vodafone's strategy of attempting to offset falling prices in Europe by expanding in fast-growing emerging markets stands in stark contrast to this time last year, when Sarin was roundly lambasted for his hopes of breaking into India because of fears he would overspend.

Vodafone had been expected by analysts to secure a deal with South African joint venture partner Telkom to raise its 50 percent Vodacom stake to around 85 percent for 3,5-billion to 4-billion pounds by the end of last year.

But partly state-owned Telkom called off talks in November after it failed to secure a parallel deal, on which its Vodacom sale hinged, to sell all or part of its fixed-line assets to mobile compatriot MTN after a disagreement about price.

"It just doesn't look like a political environment for MTN to restart talks, so there is no catalyst for Telkom to sell the (Vodacom) stake," said one industry source familiar with talks. "I fear it's not the time for Vodafone to re-enter the process.

"They (MTN) cut the price they were willing to offer and that created sufficient bad blood to scupper the prospect for a deal. I fear this one is a waiter."