Telkom will exit the consumer wireless market in Nigeria. The group says it wants to quit the code division multiple access (CDMA) business in the West African country as soon as possible.

The loss-making Nigerian operation, Multi-Links, has become a millstone around Telkom’s neck.

Economic and competitive pressures weighed on Multi-Links, leading Telkom to fully write down the net asset value of the company.

Acting group CEO Jeffrey Hedberg says Multi-Links had to be stabilised and Telkom now plans to exit the CDMA business.

“Telkom has received a number of expressions of interest which will be evaluated and quantified over the next quarter,” Telkom says.

Multi-Links lost R262m in the six months to 30 September 2010. Revenue fell 9%. Though the loss is an improvement of 29,4% over the same period last year, the company still had to impair its net asset value by another R201m related to further capital expenditure.

Telkom may retain the 5 000km fibre network it owns in Nigeria to allow it to continue to provide services to corporate customers and to other telecommunications operators.

Frost & Sullivan analyst Spiwe Chireka says Multi-Links has an “expansive, well-developed network, in particularly its fibre-optic network”.

“Telkom must ensure it gets things right with Multi-Links as of its current portfolio of companies outside SA, it holds the largest potential to make Telkom’s pan-African operations successful,” Chireka says. — Staff reporter, TechCentral