Potential Rain, Telkom tie-up faces criticism

Potential Rain, Telkom tie-up faces criticism

Telkom SA reception desk.jpg

South African telco Rain faces strong opposition from South Africa’s Takeover Regulation Panel (TRP) after it proposed a tie-up with its domestic rival Telkom.

Rain said it had asked to merge with Telkom last Thursday, though, Telkom has since responded saying no offer or proposal was received.

The TRP says that there were several procedural errors in Rain’s approach after it had allegedly detailed plans for a merger without seeking approval.

The merger, according to Rain, would create a third player to rival leading operator Vodacom and second-placed MTN.

Telkom and Rain are currently the third and fourth biggest telcos in the country.

Last month, it was announced that Telkom was in talks to sell 100% of its operations to MTN for a combination of shares and cash.

Rain has sought to avoid this, believing it would weaken its position in a highly competitive market and subsequently launched its own bid to merge with Telkom.

Rain said that merging with the 40% government-owned entity was a “logical alternative” to Telkom selling its business to MTN and would also be better for competition in the country.