MTN, Telkom in infrastructure sharing talks – sources

Could lead to reduced reliance on Telkom’s mobile division.

MTN Group, Africa’s biggest wireless operator, is in talks with Telkom SA about an infrastructure sharing arrangement for the two companies’ mobile units, according to two people familiar with the matter.

The discussions between the South African companies could lead to a reduction in the reliance Telkom, which operates the continent’s biggest fixed line service, has on its mobile division, according to the people, who asked not to be identified because the talks are private.

Telkom, the Pretoria-based company in which the South African government owns a 40 percent stake, is “in discussions with parties” on a possible mobile deal, Chief Executive Officer Sipho Maseko said at the company’s first-half earnings presentation on Nov. 18. Telkom didn’t immediately respond to an e-mail seeking comment. Nik Kershaw, an MTN spokesman, declined to comment.

MTN, based in Johannesburg, is the second-biggest provider of mobile phone services to South Africans, lagging behind Vodacom Group Ltd. It has more customers in total than Vodacom, including other countries that it operates in.

Telkom paid 1.1 billion rand ($110 million) to other mobile network operators in the six months through September compared with 1.48 billion rand a year earlier, according the Nov. 18 earnings statement.

Telkom had held earlier talks with Vodacom about sharing infrastructure, one of the people said.

Telkom Mobile active subscribers increased 6.9 percent to 1.6 million in the half year through September, the company said on Nov. 18. MTN had 203.8 million customers in 22 countries at the end of that month.

©2013 Bloomberg News

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