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Wednesday, 28 November 2007 |
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Moves to combine Telkom’s fixed-line operations with MTN, which would have paved the way for Vodafone’s African cellular expansion, are called off…
A set of deals that might have reshaped telecom services in South Africa and the surrounding region has collapsed as months of negotiations bore no fruit. It had been intended that Telkom, the incumbent PTO in South Africa, would sell its fixed-line operations to wireless-based rival MTN as a precursor to the sale of Telkom’s cellular interests to JV partner Vodafone.
The manoeuvre would have left Telkom to perform a backbone network role in SA and beyond, positioning MTN and Vodafone as lead players in the fixed-mobile and wireless-only markets of South Africa. MTN and Vodafone also saw the change as a springboard for business elsewhere in the continent of Africa.
Yesterday’s Telkom statement said of the MTN talks: “after detailed investigations into the strategic, operational and regulatory aspects of such a transaction, the parties were unable to conclude a transaction in the best interests of their respective shareholders. This decision was driven primarily by matters related to the anticipated costs and benefits of the implementation of the transaction.”
It continued: “as discussions with Vodafone regarding Telkom's investment in Vodacom were subject to agreement being reached with MTN, Telkom shareholders are advised that discussions with both MTN and Vodafone have been terminated and that caution is no longer required to be exercised by shareholders when dealing in the Company's securities.”
Even if yesterday’s news means that months of negotiation (click here) have come to nothing, Telkom’s fixed and mobile interests are now ‘in play’.
Jim Chalmers
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