The National Communications Authority (NCA) has granted conditional approval for transfer of the 70 percent majority shares in Ghana Telecommunications Company Limited (Vodafone Ghana) held by Vodafone International Holdings B.V. to Telecel Group.
Exactly a year ago, Vodafone Ghana applied to the NCA to transfer 70 percent of its majority shares to the buyer; however, this did not meet regulatory requirements, calling for a resubmission following a careful evaluation of the application on various criteria and engagements with both parties.
In a statement, the Authority said this approval is subject to concessions made by both parties and pursuant to evaluation of the revised proposal from the Telecel Group.
“Following the NCA’s decision, the buyer resubmitted a revised financial and technical proposal in December 2022 which demonstrated the needed capital investment to extend deployment of 4G and launch innovative Fintech solutions,” the statement read in part.
“The NCA found that the revised proposal provided more clarity and certainty in terms of the funding required for the acquisition and commitments from both the Seller and buyer. In addition, the buyer has strengthened the overall governance and management team, and made firm commitments toward meeting the regulatory requirements of the NCA,” it further added.
Based on this, the NCA confirmed that the revised proposal from the Buyer now meets the regulatory threshold; and hence has granted conditional approval for the transfer of shares to the buyer, including the submission of strategies for employee retention.
“The NCA would like to assure the general public and all stakeholders that it will continue to work with Vodafone Ghana and the Buyer to complete all outstanding regulatory requirements to ensure a smooth transition, as well as continuity of service delivery and improved choice for consumers and competition within the industry,” the Authority assured.
Vodafone Ghana commenced business in 1854 as a Government Department and was converted into a corporation in 1974. Subsequently, in 1993, the telecommunications division of the company was decoupled from the corporation and registered as Ghana Telecommunication Corporation. In August 2008, Vodafone International Holdings B.V (VIHBV) in Netherlands acquired a 70 percent stake in the company and thus assumed a controlling stake, with government retaining a 30 percent stake. Vodafone’s core business is the provision of telecommunication, Internet and mobile money services.
Vodafone Ghana has three subsidiaries: namely the National Communication Backbone Company Limited, which engages in renting fibre-optic Infrastructure; Vodacom Business, which provides services to engineering and telecommunication industries while providing telecommunication services and products: and Vodafone Ghana Mobile Financial Services Limited, which providides mobile money services and products.
Vodafone reported total revenue of GH¢1.33billion in the 2020 financial year (FY), which was a 3.56 percent decrease from FY2019’s outturn of GH¢1.38billion. The decline was on account of a 3.72 percent fall in Vodafone’s revenue from operations – from GH¢1.35billion in FY2019 to GH¢1.30million in FY2020. Vodafone’s total revenue increased by an average annual rate of 6.56 percent from FY2016 to FY2020.
Vodafone’s current ratios were 0.68 and 0.43 respectively in FY2020 and FY2019. This reflects a marginal improvement in the company’s liquidity. However, it underscores the scale of Vodafone’s challenges in promptly meeting its short-term obligations.
The company remained highly leveraged – as at the end of FY2020 Vodafone had long-term loans of GH¢1.38billion. The Debt-to-Equity ratio stood at negative 0.98 in FY2020.