Vodacom Tanzania acquires Smile for $27.4 million to support 4G and 5G rollout plans
Share this story
Published:
April 16, 2024
Subject(s):
Telecoms
The news:
- Vodacom Tanzania PLC (VTPLC), Tanzania’s leading telecom operator, has completed the debt-free, cash-free acquisition of Smile Communication Tanzania Limited, a small rival telecom operator, for TZS 68.8 billion ($27.4 million), to support its plans to launch competitive 4G and 5G network services.
- The agreement, signed by Vodacom Tanzania, Smile Telecoms Holdings Limited, and Smile Telecoms IP Limited (jointly Smile), will see Vodacom acquire 100% of Smile’s issued share capital at TZS 0.24144 per ordinary share.
- This acquisition, completed on April 3, 2024, comes just two years after Al Nahla Group, a Saudi investment fund, spent more than $235 million on a rescue deal.
In its public announcement, Vodacom reiterated that the acquisition is a strategic move to strengthen its network infrastructure and provide satisfactory customer service. The deal is expected to improve Vodacom’s mobile coverage and capacity.
The agreement grants Vodacom access to Smile’s 800MHz and mid-band spectrum. Additionally, Vodacom will use Smile’s 4G LTE network.
Vodacom will now consolidate its presence in Pwani, Dar es Salaam, Morogoro, Dodoma, Mwanza, Mbeya, Kilimanjaro, and Arusha, as its 4G network coverage expands.
Furthermore, Vodacom plans to add a sizable number of new customers to its growing market share. As of March 2023, Smile had only 15,171 subscribers, indicating a 0.025% market share. Consequently, the new acquisition will do little to increase Vodacom’s market share.
Nigerians can now get payment cards without having a bank account. Loma Bank's GoCard gives you an prepaid card with its own dedicated account number.
According to the most recent data from 2023, Vodacom led Tanzania’s telecom market with 30% of total subscriptions (19.1 million customers as of December 2023), followed by Tigo (28%),
Airtel (27%), Halotel (12%), and TTCL (3%).
Find more insights at
Intelpoint.
In May 2013, Smile, which will now operate under the umbrella of VTPLC,
introduced its 4G LTE mobile broadband service in Tanzania. 10 years later, the company had grown its customer base to 13,840 mobile subscribers.
The new spectrum from Smile will add to the frequencies that Vodacom acquired in Tanzania’s auction in October 2022, where the company splurged $63.2 million to secure access to frequencies in 700MHz, 2.3GHz, and 2.6 GHz.
In a 2018 auction, Vodacom
spent $10 million for rights to 20MHz in the 700MHz band. Vodacom’s spectrum holdings also include 900MHz, 1800MHz, 2100MHz, and 3500MHz.
According to its
Annual Integrated Report for the year ending March 31, 2023, the telecom company deploys most of its spectrum for mobile services, while prioritising 2300MHz and 3500MHz for fixed 4G and 5G services.
Vodacom Tanzania has acquired Smile Communication Tanzania Limited for TZS 68.8 billion ($27.4 million) on a debt-free, cash-free basis to accelerate the rollout of its 4G and 5G network services.
techpoint.africa
