Telkom SA to sell CDMA business

29 June 2011 |


South African telco, Telkom SA, has signed a heads of agreement to sell its CDMA business Multi-Links to Helios Towers Nigeria.

The agreement comes after months of legal wrangling between the Nigerian tower company and Multi-Links over a breach of contract by the Telkom subsidiary.

Helios Towers Nigeria sued Multi-Links for $252 million after Multi-Links rejected the validity of a ten-year contract to lease phone towers built by Helios. The Telkom subsidiary abandoned the deal after only three years. On June 7 this year the High Court in Lagos ruled that the contract was valid.

Following these events Telkom said that it would no longer fund the CDMA business and attempted to sell it to Visafone in early June. These negotiations also fell through due to certain conditions not being met according to Telkom.

It has also recently been reported that Helios had an injunction to prevent the sale of Multi-Links until their quarrel was resolved. Both Multi-Links and Telkom deny that information was concealed from Visafone.

Under the new agreement Helios Towers Nigeria will own 100% of Multi-Links. According to Telkom, the sale of the business may be worth over $10 million if all prerequisite conditions are met.

It is not clear from Telkom’s statement whether this means the matter is completely resolved but it should at least give the South African incumbent a cash injection over the potential loss that could have been in its place.