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Vodacom to reduce capex by $134m

10 November 2009

Vodafone-controlled Vodacom is focussing its capex in its South African base and cutting back expenditure from other sub-Saharan countries

Read more: Vodacom Vodafone capex South Africa Telkom MTN Tanzania Mozambique

Comment: Vodacom was once a partnership between Vodafone and South African incumbent Telkom, but that partnership has ended and Vodacom is controlled by the global group but has local investment. Vodacom, Telkom and a third South African company, MTN, are all investing in sub-Saharan operations — but the South African telecoms economy is doing better, and will continue to grow as new cables from Europe and India terminate there in 2010.

African operator Vodacom is planning to reduce its capital expenditure on the continent outside of South Africa by $134 million, according to reports. The Johannesburg-based operator had initially planned to spend $402 million, which has now been decreased to $268 million, to be spent over the next six months.

The move comes as a part of the company’s efforts to use funds in places with better growth prospects. Vodacom is likely to invest $672 million in South Africa as the economic indicators are positive, as compared to countries such as Tanzania and Mozambique.

The company, now controlled by Vodafone, has spent $80 million in Tanzania and $40 million in Mozambique in the first half of 2009.

Vodacom’s first-half profit was negligible after it wrote down the value of its Gateway Communications business, for which it paid $700 million in 2008. GTB




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