South Africa’s largest telecom wanted control of Safaricom; now a Kenyan court battle threatens the deal

Vodacom, based in Johannesburg, said on Friday that the court opted not to decide on the application on October 13, choosing instead to speed up the hearing of the main appeal.

“The prevailing status quo in respect of the shares and purchase consideration shall be maintained pending the hearing of the appeal,” it said.

On September 15, Kenya’s High Court ordered that the 15% stake in Safaricom sold to Vodacom be returned to the National Treasury.

The sale generated 204.3 billion shillings (about $1.6 billion), with another 40.2 billion shillings raised by securing future dividend payments.

The court ruled that the transaction breached the Constitution, arguing that key documents had not been made available for public scrutiny and that there was no clear justification for the shares’ valuation, as seen on Bloomberg.

The debacle was reported in December, when the Vodacom Group Ltd. was set to take control of Safaricom Plc, in a multi-billion-dollar deal.

The agreement covered an upfront payment of 5.3 billion rand ($310 million) in exchange for the rights to future Safaricom dividends that would otherwise be paid to the Kenyan government.

The acquisition was intended to bring Vodacom’s total stake in Safaricom to 54.9%, the company said.

To fund the purchase, Vodacom was set to use loan agreements with Vodafone and an externally sourced Kenyan-shilling facility guaranteed by Vodacom.

Under the deal, Amazon Leo will deliver download speeds of up to 1 gigabit per second (Gbps) and upload speeds of 400 megabits per second (Mbps).

This will allow Vodafone to connect its main network to mobile towers in remote areas without the high cost of installing fibre-optic cables, Reuters reported.

Vodafone plans to begin rolling out the satellite service in Germany and other European markets later this year before gradually expanding it across Africa through its subsidiary, Vodacom.

Amazon Leo currently has more than 200 satellites in orbit, with hundreds more built and awaiting launch, according to Vodafone.

The growing satellite network could help telecom operators connect areas where traditional infrastructure is expensive or difficult to deploy.

Unlike traditional geostationary satellites that orbit much farther from Earth, LEO satellites operate at much lower altitudes, reducing latency and improving performance for real-time applications such as video calls, cloud services, and mobile data traffic.