MTN eyes Telkom SA acquisition
Africa’s MTN Group is allegedly mulling the acquisition of a majority stake in South Africa’s fixed-line incumbent Telkom, in a bid to better compete with rival Vodacom.
People familiar with the matter told Bloomberg that MTN has held “exploratory discussions” over the acquisition, but a decision is yet to be made.
Telkom is 40% owned by the South African government and has a market value of $3.4 billion. The operator has informed the Johannesburg Stock Exchange (JSE) that it has been in talks with MTN SA “regarding the potential extension of their existing roaming agreement to include bilateral roaming and outsourcing of the operation of Telkom’s radio access network”.
Telkom spokeswoman Jacqui O’Sullivan said via text message: “Telkom is engaging in discussions with a number of industry players to consider how we, as an industry, could operate more efficiently.”
A merger between Telkom and MTN would allow the latter to bundle fixed and mobile services, and provide a boost for Telkom’s existing mobile offering which sits at number four in the market.
Rival Vodacom leads the market and in May last year, the Vodafone-owned operator signed an agreement to acquire South African broadband firm Neotel for $676 million.