Vodafone Group Plc’s South African unit is considering a bid for unprofitable state-owned Internet company Broadband Infraco, as the country works toward the privatization of some government assets.
The potential sale of Broadband Infraco would follow a report commissioned by President Jacob Zuma that showed South Africa should consider selling stakes in state-owned companies to private entities to improve their finances and tackle operational failures. The government is considering merging two state-owned airlines and selling off a stake in the enlarged carrier to private investors, Finance Minister Pravin Gordhan said in his budget speech in February.
Vodacom shares rose 0.8% to 166.97 rand as of 12:08 p.m. in Johannesburg, increasing the 2016 gain to 9.6%. That values the company at 248 billion rand.
Vodacom, 65% owned by Newbury, England-based Vodafone, scrapped the purchase of Neotel from Tata Communications Ltd. of India after almost two years of regulatory battles and legal opposition from its competitors.
The company pursued Neotel to increase its spectrum and fiber network for broadband provision to consumers and businesses. Neotel uses Broadband Infraco’s network, which includes more than 147,000 km (91,000 miles) in fixed-line infrastructure, to deliver some of its services.