South Africa’s Communications Ministry said yesterday it backed discussions between Telkom and MTN over plans by the fixed-line operator to sell some of its infrastructure to MTN. A brief statement by the department yesterday did not reveal exactly what is being negotiated, but said: ‘As government, we are in principle supportive of the current discussions. We will await additional information in this regard prior to commenting further.’
Whilst the exact nature of the discussions remains a tightly kept secret, local analysts have speculated that MTN, the country’s largest cellco, is looking to combine its business in South Africa with Telkom’s fixed-line unit, and eventually spin the merged company off as a publicly traded company. The new company would be worth ZAR55 billion (USD8.03 billion).