Report: Etisalat in talks to acquire Multilinks

3 Dec 2010

Telkom SA has reportedly entered into talks with UAE-based Emirates Telecommunications Corporation (Etisalat) about the possible sale of the cellular division of its struggling Nigerian CDMA company, Multilinks. According to South African newspaper Business Report, which cites a report written by an unnamed Multilinks executive, officers at the CDMA operator are involved in discussions with Etisalat regarding a sale, even though this option was allegedly rejected by Telkom’s board. The UAE incumbent already provides GSM mobile services in the Nigerian market via a 40% stake in Etisalat Nigeria. Last week CommsUpdate reported that Telkom was looking to exit its ailing Nigerian unit, which registered a loss of ZAR262 million (USD37.5 million) in the six months ended 30 September 2010 and saw its subscriber base slump 8.4% to 1.86 million during the period. Telkom CEO Jeffrey Hedberg has estimated the ‘exit cost’ at anywhere between USD100 million and USD180 million. Telkom wrote down the value of Multilinks by ZAR5.2 billion in the financial year ended 31 March 2010. Telkom acquired a 75% stake in Multilinks on 1 May 2007 for USD280 million, and purchased the 25% it did not already own from Kenston Investments in January 2009 for USD130 million.

Nigeria, Etisalat UAE, Multi-links, Telkom South Africa