Nashua Mobile sells users for R2.26 billion

By on April 14, 2014
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South Africa’s largest mobile operators Vodacom and MTN have purchased Nashua Mobile’s customer base for R2.26 billion after the service provider, owned by Johannesburg Stock Exchange listed Reunert Ltd, decided to throw in the towel after.

Nashua Mobile’s ‘middle man’ business model of finding packages with various network operators to suit user’s needs was ultimately deemed unprofitable by the powers that be. “The boards of Reunert and Nashua Mobile were required to consider the long-term prospects for Nashua Mobile. After careful consideration, the boards concluded that it is unlikely that this business would generate acceptable returns,” read a statement released by Reunert.

Nashua is currently pursuing the sale of its Cell C customer base to a third party. The culmination of these transactions will result in the closure of Nashua Mobile and its operations. The applicable segments of the Nashua Mobile customer base will be migrated to the relevant acquiring parties who will maintain the current contractual arrangements with customers on the current terms.

The timing of this transaction is subject to the approval of the Competition Authorities and the successful migration of the Nashua Mobile customer base to each acquiring party. It is anticipated that these processes will take a number of months to conclude.

The South Africa has a highly competitive and saturated wireless market that has been put under more pressure by a recent decision by the communications regulator to cut the connection fee operators can charge users to access their networks.

“This was a strategic decision on our part.  Our priority now is to ensure that we maintain our service levels to our customers and that they are migrated seamlessly. We are also working hard to ensure that we minimise the impact of this transaction on our employees and make them a key focus of ours over the next while,” concludes Mark Taylor, Reunert Executive Director and Nashua Mobile CEO.

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