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Vodafone Acquires Turkish Mobile Operator
TMCnet VoIP Minute Watch Columnist
Mobile telecom group Vodafone recently announced that it agreed to acquire Telsim, a mobile operator in Turkey from the Turkish Savings Deposit and Investment Fund ("SDIF") for a consideration of USD 4.55 billion. The transaction is subject to approval from the SDIF Board and Turkish regulatory, legal and competition authorities. Vodafone expects the transaction to close in the first quarter of calendar year 2006.
"We are delighted to have won the tender for Telsim. With a larger population than every European country except Germany, and a penetration level of approximately fifty-three percent, the Turkish market represents a major growth opportunity. Our extensive operating experience and unique set of products and services positions us to compete effectively in such a youthful market and deliver a superior mobile experience to Turkish customers," said Arun Sarin, Vodafone's chief executive officer about the transaction.
The deal will in addition to the consideration price, will require Vodafone to pay USD 0.4 billion of VAT. Vodafone expects to recover this against Telsim's future VAT liabilities. Vodafone also expects to recover this payment over the short to medium term and this has been included in Vodafone's valuation of Telsim.
According to the companies' news release, "the acquisition is expected to enhance Vodafone's revenue and EBITDA growth profile; however Vodafone expects Telsim to make net losses in the short to medium term as it invests in the network, building scale and a stronger customer and brand proposition. Consequently Vodafone expects the transaction to be dilutive to adjusted earnings per share in the short to medium term."
Vodafone made news last month when it announced it agreed to sell 100 percent of its interest in Vodafone Sweden to Telenor, a pan-Nordic telecom operator. The transaction has an Enterprise Value of EUR 1,035 million (GBP 704 million). Net cash proceeds to Vodafone after assumption of net debt by Telenor will be approximately EUR 970 million (GBP 660 million).
"We have a good business in Sweden, but the particular industry structure and regulatory environment means that it makes more sense for our customers, our employees and our shareholders for a pan-Nordic player like Telenor to own the company. I'm sure that Telenor will be able to serve our customers well, particularly in the corporate sector, given its presence across the Nordic region," said Arun Sarin, chief executive of Vodafone.
Vodafone and Telenor have agreed the terms of a Partner Network Agreement in Sweden, allowing Vodafone Sweden and Vodafone customers to continue to benefit from Vodafone's global brand, products and services in Sweden.
Vodafone Group
Telsim
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Johanne Torres is contributing editor for TMCnet and Internet Telephony magazine. To see more articles by Johanne Torres, please visit Johanne Torres' columnist page.
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