News

Vodafone is in trouble in all corners of the globe this week.



The government of Ghana says it will renegotiate Vodafone’s USD900m (GBP550m) purchase of its primary telecom provider Ghana Telecom.



The announcement followed a government review of the deal in which the government only received a fraction (less than USD300m) of the purchase price, due to a series of complicated financial transactions.



The dispute, in which the UK’s Serious Fraud Office showed an interest on Tuesday, is posing quite a problem one of the world’s biggest mobile providers. Vodafone has been expanding in emerging markets, especially in Africa , and sees Ghana as a key part of this strategy and one of the most attractive markets on the continent.



Vodafone has declined to comment on the government's announcement and, in relation to the deal, denies any wrongdoing.



In addition to questioning the financial structure and implications of the deal (including the use of a Dutch holding company to conduct the sale), the government's review of the transaction queried the validity of the clause in the sale agreement which prevents Ghana from bringing corruption proceedings against “any member of the enlarged [Ghana Telecom] group”.



In India, Vodafone's Essar is facing a price war, a USD2bn tax bill and and may be forced to buy back shares from another investor.



Vodafone is number three in the enormous and rapidly growing Indian telecom market. Increasing competition has meant aggressive price cuts by Vodafone's competitors which is lowering the value of the its investment and Vodafone's profit figures are already low compared to others.



At the same time, the Indian government wants USD2 billion in unpiad taxes, and Essar, the other investor in the business, has the right to sell its 33% stake back to Vodafone for an amount between USD1 billion and USD5 billion



All these troubles come shortly after Vodafone's poorly managed businesses in Spain and Turkey suffered considerable losses. The multinational giant will be hoping for some goods news soon.