Nashua Mobile rings off

Nashua Mobile is going down and Vodacom and MTN have agreed to buy cellphone subscribers from it.

The country's biggest wireless operators will take on customers who signed up to their networks and services through Nashua Mobile, according to its owner Reunert.

Nashua finds packages to suit them from the nation's network operators.

"Every retailer is selling mobile at the moment and there just aren't enough customers to support the distribution," Nashua Mobile CEO Mark Taylor said.

After the deals with MTN and Vodacom are complete, the next step would be "the winding up of the business and the brand".

Domestic voice revenue for the country's largest phone companies is being squeezed after the Independent Communications Authority of SA cut the fees mobile carriers pay competitors to access their networks.

Nashua Mobile, which sells products for wireless operators, has more than 897000 contract subscribers and about 700 employees.

About 400000 of these users are signed up to Vodacom, according to spokesman Richard Boorman.

Reunert also provides electrical engineering and computer services.

"The handset got so expensive and subsidies have come down over the years that we're having to provide funding for customers and that was eating up a lot of our cash," Taylor said.

"For the past several years, Nashua Mobile has been trading in a saturated, highly competitive market.

"It has experienced declining average revenue per user due to lower network tariffs and lower out of bundle spend by customers," Reunert said.

Its shares rose by more than 2% yesterday, reaching its highest intraday level in nearly three months.

The shares had fallen as much as 8.3% earlier.

Reunert said Nashua Mobile had not agreed on a deal with Cell C for South Africa's third-biggest mobile subscriber base. The company said it is seeking alternative options.