MTN Group may acquire a majority holding in South Africa’s fixed-line incumbent Telkom, in a move aimed at narrowing the gap between MTN SA and Vodacom.
However, a decision is still a long way off, as only “exploratory discussions” have currently taken place, according to a Bloomberg report. Telkom is 40% owned by the South African government.
Telkom has made it known to the Johannesburg Stock Exchange (JSE) that it has been in talks with MTN SA “regarding the potential extension of their existing roaming agreement to include bilateral roaming and outsourcing of the operation of Telkom’s radio access network”.
Merging with Telkom would allow MTN to bundle fixed and mobile services. This could be a significant boost to Telkom’s current mobile offering, which languishes in fourth place in the market.
Jacqui O’Sullivan, a spokeswoman from Telkom, said: “Telkom is engaging in discussions with a number of industry players to consider how we, as an industry, could operate more efficiently.”
MTN’s rival Vodacom - a Vodafone subsidiary which leads the market – is currently trying to procure regulatory approval to acquire broadband firm Neotel, which also offers fixed-line services.