No. 76: What Does a Potential Liberty Global-Vodacom Deal Mean for Safaricom?

Liberty Global and Vodacom are in talks for some sort of deal. Early rumors were that the two were considering a merger, which would be one of the biggest ever, but Vodacom denies a merger being part of deliberations. 

What’s interesting about this news, besides John Malone continuing to take over the media world, is that Vodacom has a 40 percent stake in Safaricom, Kenya’s leading telecommunications provider. If a deal happens, could Vodacom sell off Its stake in Safaricom while spinning off its Middle Eastern and African subsidiaries like Vodacom Ghana and Vodacom Egypt?

The global media world is in consolidation mode. You probably heard about DirectTV potentially acquiringT-Mobile. John Malone’s Liberty Broadband is backing the proposed Charter-Time Warner merger. In Europe, where Liberty Global and Vodacom are based, telecom providers are pushing quad-play – television, mobile, telephone, and Internet. A deal between the two companies would probably position them to compete in this market. 

Safaricom is entering the bundling competition in Kenya, recently seeking regulatory approval to offer television services. Perhaps, it would benefit from a Liberty-Vodacom deal by gaining access to intelligence on how to best compete in this space. I think Liberty and Vodacom could benefit from tapping into Safaricom’s expertise in mobile banking and figuring out how to incorporate that into a bundling strategy.