Vodacom, South Africa’s largest mobile telecoms operator has acquired the carrier services and business networking subsidiaries of Gateway Telecommunications for US$675 million. The acquisition is aimed at extending Vodacom’s African footprint and broadening its business interests.

Vodacom’s acquisition of Gateway’s subsidiaries extends the operators presence to 17 countries and diversifies its business activities from being solely mobile-centric. 

Gateway is the continent’s largest independent provider of interconnection services via satellite and terrestrial network infrastructure on the African continent for both African and international telecoms companies.

Gateway also provides end-to-end connectivity solutions to multinational corporations operating across the region.

The move is the first step taken by incoming Vodacom CEO Pieter Uys and may be a sign of things to come as he pushes the South African operator’s presence deeper into Africa.

While Vodacom is the market leader for mobile operations on its home soil, Uys’ predecessor Alan Knott-Craig was criticised for his failure to expand the provider regionally when the time was right.

“The acquisition of Gateway reflects Vodacom’s strategy to reposition itself as a leading pan-African provider of communications services and to diversify from its current status as primarily a mobile-centric network operator,” Uys stated.

“We believe that Gateway’s significant presence across Africa will allow Vodacom to tap into the huge potential for growth in business services and connectivity and will enhance our position with multinational corporations,” he added.

Gateway has a presence in 17 countries throughout Africa and Europe, including the key market of Nigeria. It made US$257 million in sales in 2007.

Other strategic benefits cited by Vodacom include accessing Gateway’s blue chip customer base enabling the marketing of converged fixed and mobile offerings and the substantial growth potential in the nascent sub-Saharan business services market.

The transaction also involves a payment of US$25 million in relation to Gateway’s high-yield bond, and remains subject to the approval from the South African Reserve Bank and relevant regulatory and competition authorities.

China Telecom, operator of the world’s largest fixed-line network has selected Huawei to build the country’s first 40Gbit WDM (Wavelength Division Multiplexing) transmission network, in an effort to address the operator’s ever-increasing Internet bandwidth needs and to lay a foundation for providing high-bandwidth services.

The ultra high-capacity network will be built between Shanghai and Wuxi and will be capable of 10Gbit and 40Gbit hybrid transmissions.

While this is the first 40Gbit network of its kind in China, the technology has already been deployed in Europe, North America and other countries in Asia-Pacific.

According to 40Gbit advocates, the main advantages of the technology is a 50 per cent smaller footprint compared to 10Gbit-based systems, 20-40 per cent lower power requirements, as well as being easier to manage because of 75 per cent fewer wavelengths.

It is also considered beneficial when integrating with IP routers, as the routers work more efficiently if high bit-rate data streams remain intact, rather than being demultiplexed to several lower-rate signals.

Oman’s Telecommunications Regulatory Authority (TRA) has announced that six international telecoms operators and consortia have been short-listed for the sultanate’s second fixed-line licence. Ten parties had expressed interest in the licence by the August 25 deadline for submissions of interest.

Oman’s second fixed-line licence will be awarded by late October.

The identities of the six bidders have not been disclosed.

The Class 1 fixed-line licence is being offered as a 25-year build-and-operate contract, with a similar 15-year contract for the provision of broadband services.

A TRA official earlier stated that the successful bidder would have to pay seven per cent of gross revenues to the government as royalty and an upfront fee of OMR500,000 (US$1.3 million) upon selection.

The auction process is expected to be completed by late October, ending the fixed-line monopoly currently held by Omantel.

India’s regulator has been accused by the finance ministry of selling 2G spectrum in January this year at one-quarter of the market value, thereby losing approximately INR250 billion (US$5.7 billion) in income in the process.

The Department of Telecommunications (DoT) awarded pan-India 2G spectrum in January to new licencees at what was alleged to be a price equivalent  to the price of the spectrum in 2001amounting to INR16.51 billion.

Norway’s Telenor could soon be investing in India, after executives held talks with new 2G licencees over the past few days.

The finance ministry had earlier opposed the move to sell 2G spectrum below market rates, saying the additional INR250 billion would have relieved as much as 60 per cent of India’s revenue deficit in a tough financial year.

“The fact that the companies that were awarded the 2G licences command such high valuations even without start-up spectrum, infrastructure or customer base, nine months down the road, demonstrates the huge error in judgement made by the government,” stated member of parliament, Nilotpal Basu.

Datacom Solutions, Unitech, Loop Telecom, S-Tel and Swan Telecom are some of the companies to have bought spectrum at the discounted prices, and it is believed they are currently being courted by Telenor, the world’s seventh largest telecoms company.

A team of executives from Telenor has been in India over the past few days to hold talks with new licencees over possible majority stakes, it has been reported.

Apart from Vodafone, European companies have not been able to enter the Indian market in recent years.

Telenor has a subscriber base of more than 143 million, with a presence in Denmark, Norway, Sweden, Ukraine, Hungary, Serbia, Montenegro, Russia, Bangladesh, Pakistan, Malaysia and Thailand.

As reported exclusively by Comm. on July 27, Emaar, The Economic City (Emaar EC), has confirmed the award of a SAR320 million (US$85 million) strategic agreement to Ericsson to implement and operate the smart city infrastructure and the multi-purpose network for Ethraa, The Smart City. Emaar EC is the company developing the King Abdullah Economic City (KAEC).

KAEC has six key components – the Sea Port, Industrial Zone, Central Business District, Educational Zone, Resort District and Residential Communities

Fahd Al-Rasheed, CEO and board member, Emaar EC awarded the agreement to Bjorn Hemstad, chairman of Ericsson’s Central Europe, Middle East and Africa (CEMA) region, in Jeddah recently. 

Ericsson will design, build and operate the entire telephony, Internet and data plus video broadcasting infrastructure for all investors and residents within KAEC under the supervision of Ethraa, The Smart City. It is expected that operations will start in January 2009 and extend to January 2012. 

Ericsson will undertake an extensive reconciliation and survey of KAEC and custom-develop the smart city infrastructure through a dedicated R&D team. The ICT foundation to be developed by Ericsson will ensure that investors and residents in KAEC will have access to the highest broadband connectivity possible, telephony and multimedia including seamless video connectivity.

With respect to Comm.’s breaking story on July 27, according to one insider involved in the KAEC project, the award of the contract to Ericsson was based purely on technical merit rather than political considerations. “Ericsson provided the best solution, and Emaar went with them. Cisco wasn’t in the running as far as they were concerned. In fact, Huawei was the second choice.”

KAEC, spread over 168 million square metres on the Red Sea coast, is the largest private sector development in the region.