MTN skirts Telkom rumours

Johannesburg, 30 Aug 2007

MTN group president and CEO Phuthuma Nhleko has declined to comment on speculation of talks with Telkom.

Nhleko was responding to questions from analysts regarding rumours that MTN was considering acquiring - or entering a joint venture with - the fixed-line giant.

However, he said the group was keeping an "open mind" on options to improve its access to the corporate market.

"I can't comment on [a possible deal with] Telkom. However, I will say we will consider anything that improves our ability to address the corporate market."

Looking for position

In July, ITWeb reported on market speculation that the cellular operator may be looking to acquire Telkom following the fixed-line company's unbundling of its stake in competitor, Vodacom.

At the time, BMI-TechKnowledge senior telecoms analyst Richard Hurst said such a transaction could present MTN with a stronger position locally and in Africa.

"When you look at MTN's local business, they have had great opportunities in terms of data, but have failed to cross the line. With Telkom as part of the company, they could start looking at bundling packages, which would give them a better position in the market. [Additionally] a Telkom buy would give it direct access to the SAT-3 cable landing points in many of its African operations," he said.

A Telkom deal could also help the company address its transmission concerns.

Yesterday, Nhleko said that where transmission was concerned, its South African operation was looking at being self-reliant. This was vital to delivering on its more aggressive data strategy, he noted.

Nigerian tests

MTN's activities in Nigeria also suggest the company may be eyeing fixed-line assets.

In October, the operation launched its ultra-modern fibre optic transmission backbone in the region. Two months later, MTN Nigeria acquired VGC Communications as a "strategic platform to expand its presence in the corporate market".

Although VGC had a licence to provide both fixed and mobile services, its focus had largely been on establishing its fixed-line business.