South Africa’s Nashua mobile has announced the approval of a number of sales by the Competition Tribunal in the country, which will see mobile operators MTN, Vodacom and Altech Autopage take over the company’s subscriber base.
The move, which was approved without conditions will see subscribers’ accounts transferred to the three mobile operators with effect from 4th November, this year. Subscribers will be notified when the transfers are successfully done through the Short Messaging Service (SMS) platform.
Nashua Mobile made an announcement in April this year that it was headed for closure and was planning to enter into separate and distinct sale agreements that would see its subscribers sold back to the three mobile operators.
Following the approval, the sales to the mobile service providers will generate a sum of R2.26 billion ($215 million) for Nashua, with proceeds being used to settle liabilities of the company to support the growth strategy of its owner Reunert.
The move to sell was decided through a board meeting following an expiry of the service provider agreement between Nashua Mobile and Vodacom as well as the expiry of the incentive agreement between MTN and Nashua Mobile under the MTN service provider agreement.
Nashua Mobile owner Reunert said it was unlikely that the business would generate acceptable returns as it had contributed to a decline of 8% in earnings per share for a period of six months.
Revenue for Nashua had decreased by 5%, as a result of the continued price deflation in the mobile industry following a move by the country’s communications authority to cut the fees mobile carriers pay competitors to access their networks, as well as the impact of the reduced incentives received from the service providers.
Nashua Mobile sells products for South Africa’s wireless operators to over 897,000 subscriber base, with about 400,000 of those users signed up to Vodacom.
