KT Corp. may acquire 20% stake in Telkom (Africa, South Korea)
KT corp., a prominent South Korean telecommunications operator, is reportedly looking to acquire a 20% stake in South Africa’s Telkom for approximately $ 575 million. Industry analysts believe that this deal would be beneficial to both entities as Telkom is a good investment target for KT, while the South Korean operator’s expertise in the telecom industry will be of great value to Telkom.
As per reports, KT Corp has said that it has been negotiating the deal with Telkom for several months, but company officials are still not certain that a deal may emerge. Telkom’s share price has been on the downfall since its previous partner, Thintana Consortium pulled out and the government took control of the management through its golden share.
Tata Communication’s S. African unit plans restructuring (India, South Africa)
South Africa’s Neotel, a unit of Tata Communications is considering restructuring as it faces tough competition in Africa’s biggest economy.
Launched in 2006 after long delays, the company began offering telephone and internet services to corporate customers in March 2007, and has yet to turn a profit.
According to Neotel, it would consider realignment and restructuring options.
It was not clear whether the restructuring would result in job cuts or closing down parts of the business.
Neotel added that it was trying to ensure it was sufficiently geared to meet the challenges of the market.
It competes for corporate clients with Telkom, Internet Solutions — a unit of Dimension Data, and mobile phone group MTN and Vodacom’s business unit.
Neotel is rolling out wireless and fibre-optic networks to snatch fixed-line revenues from Telkom, which recently launched its own mobile unit.
Telkom in talks to buy CamGSM stake (Indonesia)
PT Telekomunikasi Indonesia (Telkom) is in talks to acquire a majority stake in Cambodia’s largest mobile operator by subscribers, CamGSM, in a deal that could be worth over US$500 million.
According to reports, the planned acquisition of CamGSM would value the cellco at around US$1 billion.
According to Tanri Abeng, Telkom’s chief commissioner, he hopes that the process of acquisition will be completed by the first quarter next year. The company has made it through the bidding process and they are now in talks to get financial details done, but they are surely going to take a majority stake.
CamGSM was established in April 1996 as a joint venture between Luxembourg’s Millicom International Cellular (MIC, 58.4%) and the Royal Group of Cambodia (41.6%).
Etisalat in talks to buy Multi-Links
South Africa’s Telkom is reportedly in talks with UAE based Etisalat over the sale of its Nigerian CDMA network, Multi-Links.
Telkom previously stated that it was looking to sell the Nigerian subsidiary, and Etisalat already owns an existing GSM and 3G license in the country.
According to reports citing a report by the Communications Workers Union (CWU), an option to sell 80% of the company to Etisalat was initially rejected by Telkom, but that talks are still continuing.
According to company’s executive, in the interim, it is common knowledge to the entire company that Multi-Links acting Chief Executive and acting CSMO (chief sales and marketing officer) are involved in discussions with Etisalat regarding the merger/sale due to the absence of viability of the company. This absence of viability was totally created and is still being engineered by them.
Telkom SA brought a 75% stake in the Nigerian mobile network operator in 2007 for US$280 million, and took full ownership in 200 for US$130 million.
Multi-Links provide fixed, mobile, data and international communications services in Nigeria.
Telkom’s Multi-Links plans to exit CDMA market
Nigeria’s premier Code Division Multiple Access (CDMA) operator, Multi-Links Nigeria is planning to exit the CDMA market, as a part of its strategic repositioning efforts in the Nigerian market.
According to Multi-Links Telkom Nigeria’s Acting Chief Executive Officer, Vincent Raseroka, the decision to exit the market was purely based on business realities. It is strategically, financially and commercially challenging for them to continue to do business in this segment. With a current market share of 2.6% in a market dominated by the GSM technology, it has become imperative that we explore other options and chart a new path to growth and profitability for ourselves as a business by utilising our fixed infrastructure here in Nigeria. A number of contracts have rendered Multi-Link Telkom’s CDMA business unprofitable and unsustainable. His company was committed to reducing costs in a manner that ensures sustainable long-term benefits.
Raseroka added that despite the comprehensive turnaround programme of the company in March this year, the CDMA business in Nigeria is still facing stiff challenges in a highly competitive environment, requiring scale to successfully compete. Despite recent intervention, Multi-Links operating revenue decreased by 1.7%.
Subscriptions and connections revenue decreased 18.2% due to termination of access fees as a result of increased competition. Traffic revenue decreased 24.6% mainly due to decrease in traffic volumes and higher churn rates. For the time being, their CDMA operations will continue to run as usual. Multi-Links will work with the NCC to find a solution. Once the decision is finalized, Multi-Links will notify customers accordingly with sufficient lead time.
Telkom’s 8ta Aims for 15% of South Africa’s Mobile Market
Telkom South Africa Ltd., Africa’s largest fixed-line phone company is aiming to capture 15% of South Africa’s mobile-phone market in five years after its wireless service starts on Oct. 18.
According to Amith Maharaj, the division’s managing executive, Telkom’s 8ta mobile unit will seek clients among the company’s 4.3 million fixed-line users, of which 2.1 million are businesses.
The company’s mobile offering has been in development for two years and is part of its strategy to offset the fixed-line business’s falling revenue and market share. Telkom’s voice traffic fell 9.3% in the year ended March 31 because of competition from fixed-line rivals and wireless services.
According to Maharaj, 8ta’s call charges will be about 60% lower than the average rates South African mobile-phone users now pay. Customers will earn free air time by receiving calls, and 50 free text messages for the rest of the day after sending at least five messages. The company is targeting as many users as possible. Telkom wants users to talk more on the phone. South Africa has an average of 90 minutes of monthly use per client, compared with 160 minutes in Chile and 190 minutes in Turkey, countries with similar levels of gross domestic product per capita.
Telkom is spending $880 million on building its mobile network. It has constructed 800 base stations and plans 3,200 more. It has a national roaming agreement with MTN Group Ltd., Africa’s largest mobile phone operator.
Telkom will be the fourth mobile operator in South Africa and will compete with MTN, Vodacom Group Ltd., the largest provider of mobile phone services to South Africans, and Cell C Ltd., which is the third-largest operator. Telkom previously owned a 50% stake in Vodacom, which it disposed of through a sale and spinoff.
MTN increases subscribers by 4% in Q3 (Africa)
MTN, Africa’s biggest mobile operator, increased its subscribers by 4% in the July-September third quarter, conquering strong competition and price cuts from rivals.
The company also raised its forecast for new users this year to 22.9 million, from 21.1 million last year.
According to MTN, it had 134.4 million users at the end of September, compared with 129.2 million at the end of June.
MTN is getting ready for competition from rival Bharti Airtel in Africa, which is waging a price war and plans to spend a total of $1.1 billion over the next three years on network upgrades in its sub-Saharan business.
MTN also faces tuff competition from Vodafone, which has units such as South Africa’s Vodacom. In South Africa it also faces new competition from a new entrant 8ta, Telkom’s mobile phone unit, which was launched this month.
Competition is also hitting up in MTN’s key market of Nigeria, one of the world’s fastest growing telecoms markets. Its Nigerian unit recorded a 5.1% rise in new customers to a total of 36.8 million.
Telkom to launches new brand ’8ta’
Telecommunications group has revealed details of its new mobile brand ‘8ta’. The new mobile network is launching prepaid cellular services that will be available from coming Monday. Post-paid packages will be available in November and corporate services will launch within six months.
8ta will offer flat rates without off-peak and on-peak periods. A call from an 8ta mobile phone to a fixed line will be charged at 65c per minute, while mobile to another mobile will cost R1.50 per minute. International calls to over 100 countries will cost R2.50 per minute.
Data connections are billed at R1 per megabyte, but 8ta will also have data bundles available with data prices from 25c per megabyte. The network will allow speed up to 7.2Mbps for downloads on HSPA 3G technology.
According to Managing executive of the new Telkom Mobile division, Amith Maharaj, 8ta is the consumer brand for Telkom Mobile while corporate customers for mobile will be addressed under the Telkom Business brand. 8ta is launching with aggressive prepaid pricing that is designed to encourage more usage of mobile voice and data services.
Maharaj explained that there is a single, per minute price for calls that stays the same 24 hours a day, 7 days a week. The company has designed 8ta to be simple to understand and remove the clutter.
8ta will also give subscribers 50 free SMS messages to use on days where they send more than five paid-for messages. The free messages will expire at midnight on the day they were earned.
Bakrie to acquire Telkom CDMA unit (Indonesia)
Indonesia’s PT Bakrie Telecom is set to acquire the CDMA unit of PT Telekomunikasi Indonesia in a share exchange deal worth up to US$1 billion.
The deal is going to be the biggest in Indonesian telecoms since Qatar Telecom bought a stake in PT Indosat for US$1.35 billion in 2008 and would give Bakrie Telecom a dominant position in the fast-growing Indonesian CDMA market.
According to sources, both parties need to conduct one final valuation to complete the plan. The company expects the deal will be fully completed by early next year.
According to an anti-trust agency, Bakrie Telecom, controlled by PT Bakrie & Brothers, is already Indonesia’s second-biggest CDMA operator and the acquisition would give it more than 90% of the CDMA market.
