SOUTH AFRICA’S TELKOM ANNOUNCES INTENTION TO BECOME A REGIONAL PLAYER THROUGH ACQUISITION

Mergers, Acquisitions and Financial Results

South Africa Telkom has set in motion a process that could see it acquire astake in Kenya’s fixed line telecoms service provider, Telkom Kenya.

Mr Sizwe Nxasana, the Chief Executive of South Africa Telkom told Reutersthat his firm was in talks over possibilities of entering the Kenya andTanzanian markets as well as the Democratic Republic of Congo. "In Kenya weare looking at a number of opportunities which include the incumbent," hesaid, adding that the company is also considering bidding for any licencesthat are up for grabs here.

Kenya had planned to fast-track the opening of its telecoms industry by privatising Telkom Kenya and licensing a second national carrier, but the process was disrupted early this month when the Government dissolved the regulatory board.

Nzasana said Telkom was considering bidding for a stake in the state-owned phone company in the DRC, which wants to liberalise its telecoms industry and where the fixed-line operator is still part of the national Post Office. In Tanzania, Telkom is looking at running phone directories — both hard copies and online, Nxasana said.

Telkom also reiterated it would buy all of Vodacom given the chance, but that fellow shareholders Vodafone and Venfin were not keen to sell.

"We would like to get 100 per cent of Vodacom but all the shareholders are buyers so essentially there is a stalemate," he said.

Nxasana was responding to press reports that British giant Vodafone wants to raise its 35 per cent stake in Vodacom and is lobbying the South African government to push Telkom into selling.

He said Vodafone had long been keen to raise its Vodacom stake but that he did not know whether the company was lobbying Pretoria. In any case, Telkom had no intention of selling.

"It is unthinkable that Telkom not be in the mobile space.

We want to hold on at least or increase what we have." Meanwhile, Nxasana said South Africa Telkom was optimistic it will succeed in a planned bid for its Nigerian counterpart, Nitel, and believes any deal could be wound up by the middle of the year. Gaining a foothold in Africa’s fastest-growing telecom market was key for the company, he added.

"We are in a very strong position.

We are quite optimistic," he said, adding he had heard Telkom had been shortlisted as a bidder, but had not yet been officially informed.

Telkom and 20 other suitors officially expressed interest in acquiring the 51 per cent stake in the debt-laden firm. Telkom is bidding with its majority-owned cellphone business Vodacom, which wants to buy Nitel’s cell phone business M-Tel.

The Nigerian government will make a shortlist before due diligence is conducted and the companies make formal bids.

"We should hear (about the shortlist) in the next few weeks... they are looking at mid-year for completion," Nxasana said.

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