Vodafone is acquiring a 70 percent stake in Ghana Telecom for US$900 million from the local government, it announced on Thursday.

The country is one of the most attractive markets in Africa, thanks to a young population, a low mobile penetration of about 35 percent and a subscriber growth of more than 55 percent per year, according to Vodafone.

A stable political background in Ghana, which is one of the challenges in Africa, also helps.

As part of the price, the government has also agreed to transfer its fiber-based network to Ghana Telecom and Vodafone.

Ghana Telecom is the country's third largest mobile carrier, with 1.4 million subscribers, which gives it a 17 percent market share, according to numbers from the end of March, said Vodafone.

Vodafone already has made large investments in Africa; it has a presence in Egypt, Kenya and South Africa, via its own brand, Safaricom, and Vodacom, which also has a presence in other African countries.

The operator expects the deal to close during the third quarter. Its future plans for Ghana include the introduction of M-PESA, a mobile money transfer system which, for example, can be used by someone in an urban area to forward money to relatives in rural areas, while people in rural areas can pay off a loan in an urban area. However, no launch date has been announced yet, according to Vodafone spokesman Simon Gordon.

The African market is showing a lot of promise. Nokia earlier this year launched its latest generation of mobile phones for the developing markets in South Africa.

The number of mobile accounts in Africa has risen to 282 million, an increase of 70 million, in the last 12 months. Improved coverage has added another 46 million potential customers, reported industry organization GSM Association in May.

Question 1. Discuss how Vodafone may hedge earnings from its Ghanaian subsidiary, and what accounting issues it may face. Also any other thoughts about the future of the cell phone market in Africa and the involvement of firms from outside Africa.