South Africa: Telkom buys MWEB Africa

Investment

Naspers has finally got rid of MWEB Africa by private sale rather than the auction it had previously announced it was going to run. Its disposal of the company would seem to put paid to any Triple Play ambitions the company might have harboured. It has decided not to sell its South African operation because of current market conditions. Telkom itself has exited from doing Pay-TV using IP-TV and there has been no announcement as to who will replace it as the key shareholder in Telkom Media.

South African fixed line telephone group Telkom has agreed to buy all of MWEB Africa and a 75% stake in MWEB Namibia from Naspers for R610m, it was announced on Monday. These shareholdings will be acquired from Multichoice Africa Limited and MIH Holdings Limited respectively, which are members of the Naspers Limited Group.

MWEB Africa is an internet services provider in Sub-Saharan Africa (excluding South Africa) and also provides network access services in some countries. Although its operations are largely focused on corporate customers, MWEB Africa's predominantly satellite-based Internet access offerings allow the company to reach a wide range of customers, many of whom are not reached by traditional fixed-line infrastructures.

The MWEB Africa group is headquartered in Mauritius with operations in Namibia, Nigeria, Kenya, Tanzania, Uganda and Zimbabwe, an agency arrangement in Botswana and distributors in 26 Sub-Saharan African countries.

The successful conclusion of the agreements being entered into is subject to conditions precedent, including regulatory approvals being obtained in certain African jurisdictions. The transaction forms part of Telkom's stated strategy of expanding into Africa through acquisitions of mobile companies and IT companies following the deal to sell part of its stake in Vodacom and spin off the rest to shareholders last week.

South African media and entertainment firm Naspers is no longer selling its local internet service provider Mweb South Africa."Given economic conditions globally and the contraction in credit markets, shareholders are also advised that Naspers has terminated the auction process for the disposal of Mweb South Africa," it said in statement to the JSE.