It’s end of the line for Nashua Mobile

HANGING UP: Nashua Mobile, which has two stores in Port Elizabeth, is closing shop
HANGING UP: Nashua Mobile, which has two stores in Port Elizabeth, is closing shop

SOUTH Africa’s largest telecoms companies, Vodacom and MTN, are set to spend R2.2-billion in a buyout deal of subscribers signed with Nashua Mobile.

Reurnet‚ the principal of Nashua Mobile‚ said yesterday its business model was not sustainable and it would find suitable packages for subscribers with the two networks.

The firm – with Port Elizabeth stores in Greenacres and Circular Drive, Lorraine – said following the expiry of the service provider agreement between Nashua Mobile and Vodacom and the expiry of the incentive agreement between MTN and Nashua Mobile under the MTN agreement‚ the boards of Reurnet and Nashua Mobile were required to consider the long-term prospects for Nashua Mobile.

“After careful consideration‚ the boards concluded it is unlikely this business would generate acceptable returns. Accordingly‚ agreements with the purchasers for the MTN and Vodacom subscriber bases have been concluded‚” the company said.

MTN would pay 90% of disposal consideration on MTN take-on date‚ with the balance being settled within 10 business days of the MTN take-on date. Vodacom‚ SA’s biggest operator‚ would pay 85% of disposal consideration within five business days of its migration date and the balance within five days after confirmation of Vodacom’s successful bill run in respect of the Vodacom subscriber base or Nashua Mobile meeting Vodacom’s conditions for final payment.

Reurnet said Nashua Mobile was pursuing various alternatives for the disposal of its Cell C subscriber base. A decision on this would be announced in due course.

Vodacom chief executive Shameel Joosub said: “Nashua Mobile has been a great partner for 20 years and we respect the decision. We are looking forward to the opportunity of managing this customer base directly and will be focusing on ensuring a seamless handover.”

The net effect for these customers would be that they would now deal directly with Vodacom. “These customers have already been included in our subscriber numbers, so there is no impact on the size of our reported customer base‚” Joosub said.

Analysts have warned that service provider business was in decline across the world and South Africa was now catching up.

South African telecoms operators have been under pressure in recent weeks following an enormous reduction in interconnection fees‚ which have been cut in half‚ despite a high court declaration that the new regulations were unlawful. – BDlive

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