Telkom CEO Sipho Maseko has reportedly said that at the right price, the company would consider an offer to buy mobile network operator Cell C.
This is according to Reuters, which quotes Maseko as saying that Cell C is an “interesting proposition”.
“I’d like to do something with them. At the right price, I’m a buyer,” he is quoted as having said. He also said Telkom has a strong balance sheet, giving it the “flexibility to pursue … options”.
His remarks come after Oger Telecom, Cell C’s controlling shareholder, contracted Goldman Sachs, reportedly to consider bids for its stake in South Africa’s third largest mobile operator after Vodacom and MTN.
Cell C, which recently secured new debt financing, is fighting to become a bigger player in the local telecommunications market, cutting prices and aggressively attempting to poach both prepaid and contract users from its bigger rivals.
Telkom’s mobile arm, a late fourth entrant in the mobile market, has struggled to gain traction and has incurred losses running into billions of rand.
But last month, Telkom said net revenue from mobile in the quarter ended 30 June 2015 soared by 68,5% to R350m, driven mainly for demand from data.
Telkom Mobile incurred a loss of just R30m in the quarter. “This is an 87,9% improvement compared to the prior comparative period,” Telkom said.
Active mobile customers increased by 11,7% to more than 2,1m, with a blended average revenue per user of R82,87, up by 17,8% on a year ago.
Post-paid customers grew by 61,9% while prepaid customers decreased by 1,3%. The reduction in prepaid customers was due to a clean-up of the revenue-generating subscriber base, Telkom explained.
Telkom is hoping soon to conclude a deal with MTN in terms of which the two companies’ users will roam on each other’s networks.
Telkom is also planning to outsource management of its radio access network – the part that connects wireless users to its base stations – to its rival. The proposed deal is currently being scrutinised by the competition authorities. – © 2015 NewsCentral Media
