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Vodacom in R1bn deal with Prasa

Johannesburg - South Africa’s biggest mobile network Vodacom says it has entered a 15-year telecommunications partnership deal with the Passenger Rail Agency of South Africa (Prasa).

The deal, which has been done with Prasa subsidiary Intersite Asset Investments, is worth over R1bn, said Vodacom [JSE:VOD].

The Prasa partnership agreement comes after National Treasury’s confirmation earlier this month that Vodacom has secured a R5bn government mobile communications contract.

The first part of the latest agreement seeks to further monetise Prasa’s telecommunications assets by tapping Vodacom Business’ enterprise channel capability.

This agreement broadly includes the likes of virtual private network connectivity and dedicated internet access.

The second part of the deal involves Vodacom leasing Prasa’s fibre optic cables and making these assets commercially available to government and enterprises.

Vodacom added that the agreement forms part of Prasa’s telecoms assets commercialisation process, which started in 2013.

“The South African economy is quickly digitising, the demand for high speed broadband is increasing daily and optic fibre network deployments are crucial in the delivery of high speed broadband services,” said Vuyani Jarana, Vodacom business chief officer in a statement.

“It therefore makes perfect sense for Vodacom to work with strategic partners like Prasa to weave together existing fibre assets to create wider networks that shorten time to market,” said Jarana.

Through the agreement, Prasa - through Intersite - is expected to generate revenue through its fibre assets as well as on-sell Vodacom’s enterprise products and services to the wider enterprise market in South Africa.


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