RUMOURS COME THICK AND FAST IN SOUTH AFRICA ON THE BRINK OF COMPETITION

Mergers, Acquisitions and Financial Results

South Africa's ICT sector is in a high state of excitement with competition only a few months away. On a recent visit we picked up the following rumours that may soon have an impact on the market:

- Telkom is rumoured to be buying Business Connection, the number two competitor to Didata, which puts its acquisition of 15% of Telkom's shares in a slightly different light.

- Vodafone will buy Telkom’s share in Vodacom. With multinational ownership, the pace of pan-continental competition would soon heat up. If Vodacom goes back into Nigeria, it will be the first time it's taken on MTN head-to-head.

- Judgement day is very close for the SNO. The challenge by Nexus has to be settled quickly if the operation is to have any chance of entering the market before full competition starts. The cynical are saying that maybe this is one motivation for the challenge. Eskom and Transtel's Board's have already announced that they are out of the telecoms business. The fibre assets built with Government funds costing R1.8bn would be sold in a fire sale for the much, much smaller written down sum at which they appear in the accounts. Any takers? Well it would probably be MTN who'd take this bargain. The optimists still maintain that the Government cannot let the SNO fail for precisely this reason. The Government has the means to see off the Nexus challenge but do they have the will?