[kictanet] It is more interesting in SA

[Eric Osiakwan]

Well, the mobile operators are buying the incumbent in Joburg and the  
politicians are comfortable with the situation....really interesting  
times

South Africa's Government Backs Telkom Asset Sale to MTN
The communications department said 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 removes one of the main hurdles  
that any deal would face, since the government holds 38,9% of  
Telkom.. "As government, we are in principle supportive of the  
current discussions. We will await additional information in this  
regard prior to commenting further."
The government is presumably now more au fait with both parts of  
Telkom's plan, since the department is working "in an  
interdepartmental task team to ensure that the interest of the  
country, all the workers and those of shareholders is protected".
Analysts think MTN may combine its business in SA with Telkom's fixed- 
line unit and spin that off in a publicly traded company. The new  
company would be worth R55bn, and MTN might give its investors shares  
in the new company, said Scott Ryall, an analyst for Macquarie Bank.
"Although we don't believe there would be significant synergy from  
combining the two South African businesses, this transaction could  
still be a positive for MTN," Ryall said.
An outright purchase by MTN of Telkom's fixed-line business would be  
the "worst outcome for MTN and the best for Telkom" as it would  
dilute MTN's growth and its attraction as an emerging markets company  
and transfer the risk of owning a fixed-line network, Ryall said.  
However, Telkom investors would benefit from a share price upside of  
up to 15%, he estimated.
A second option was for Telkom itself to buy MTN's local operations  
after Telkom sold its shares in Vodacom, Ryall said. MTN's growth in  
SA had slowed as the market became saturated. Selling its local arm  
to Telkom may make MTN's operations in 20 other countries look more  
"appealing to growth investors ," Ryall said.
(Source: Business Day)


Eric M.K Osiakwan
Executive Secretary
AfrISPA (www.afrispa.org)
Tel: + 233.21.258800 ext 2031
Fax: + 233.21.258811
Cell: + 233.244.386792
Handle: eosiakwan
Snail Mail: Pmb 208, Accra-North
Office: BusyInternet - 42 Ring Road Central, Accra-North
Blog: http://blogs.law.harvard.edu/eric/
Slang: "Tomorrow Now"




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