Vodacom has increased its share of the African telecom industry by acquiring the subsidiaries of Gateway Telecommunications for $700 million.

"The acquisition of Gateway reflects Vodacom's strategy to reposition itself as a leading pan-African provider of communications services and to diversify from its current status as primarily a mobile-centric network operator," said Pieter Uys, Vodacom Group CEO designate. "We believe that Gateway's significant presence across Africa will allow Vodacom to tap into the huge potential for growth in business services and connectivity and will enhance our position with multinational corporations."

Gateway is Africa's largest independent provider of interconnection services through satellite and terrestrial networks, and provides a range of connectivity products to multinational corporations operating across Africa, said Gateway CEO Peter Gbedemah.

Gateway has 350 employees in 17 countries throughout Africa and Europe, and for the year ended Dec. 31, 2007, the company's sales were $257 million.

The buy gives Vodacom immediate access to 40 markets in which the company is seeking to grow its geographic footprint, including Nigeria, said Uys.

The deal is subject to South African Reserve Bank and regulatory approval, which Uys hopes will be obtained in the next three months. The deal does not include Gateway's broadcasting division, which operates cable television station GTV.

Under the terms of the deal, Gateway will get access to Vodacom's fiber, which will boost services that are reliant on satellite.

Vodacom listed the purchased subsidiaries as Gateway Telecommunications SA (Pty) Ltd, Gateway Communications (Pty) Ltd, Gateway Communications Mozambique LDA, Gateway Communications (Tanzania) Ltd and GS Telecom (Pty) Ltd and their respective subsidiaries.

The IDG News Service is a Network World affiliate.