Nashua Mobile to Close Down - Sells Customer Base to Vodacom and MTN

Nashua Mobile a South Africa based mobile airtime reseller has announced that it is selling its customer base to Vodacom and MTN as the company has decided to close down after it didn't renew its reseller agreements as the company decided that the market was no longer viable for it.

Nashua Mobile said that it has not renewed its agreements on the terms on which it was appointed as a service provider to MTN andVodacom which recently expired.

Although the value of the deal wasn't disclosed, it is estimated to be in the region of USD215 million.

The company is also pursuing the sale of its Cell C customer base to a third party.

For the past several years Nashua Mobile has been trading in a saturated, highly competitive market. It has experienced declining Average Revenue Per User (ARPU) due to lower network tariffs and lower out of bundle spend by customers. The decline in the least cost routing (LCR) business and competitive pricing in the market have further reduced revenue. Customer financing has increased as more subscribers move to expensive smart phones requiring higher level customer funding. These factors have contributed towards declining revenue, returns and cash flow.

This resulted in a requirement for Nashua Mobile to assess the sustainability of its business model when it's Service Provider and Incentive agreements came up for renewal.

Commenting on the transaction, Mark Taylor, Reunert Executive Director and Nashua Mobile CEO says, "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."