Telkom on Monday revealed it is considering buying information and communications technology (ICT) assets as it seeks to bolster its presence in the business technology market.

In slides accompanying the group’s interim results for the six months to the end of September 2011, Telkom says it is “considering ICT acquisitions”. It says the ICT industry is expected to be the “biggest growth sector in SA over the next five years”.

If Telkom attempts an acquisition, it will not be the first time it’s done so. Five years ago, it made a play for listed IT group Business Connexion, but the R2,4bn deal was thwarted by the competition authorities, which were concerned about the impact it could have on competition in the sector.

Telkom’s record at acquisitions has, however, proved dismal, with its investment in Multi-Links in Nigeria costing it billions of rand. Telkom has extricated itself from the Multi-Links business. It has also been forced to write down the value of its other non-SA Africa business, iWayAfrica.

In the slides, Telkom reveals that “based on accessibility, growth potential and strategic fit”, it is interested in expanding its presence in unified communications, in cloud services (infrastructure as a service and software as a service), in local-area network management and in information systems outsourcing.

It says it wants to be the number one provider of fixed and converged communications and network services to the business market in the next five years. Also, it wants to be the second biggest player in the business cloud services market.

Telkom management has also provided more insight into why the company is keen to sell 20% of its equity to KT Corp (formerly Korea Telecom). It says the two companies share a similar history and that KT is 10 years ahead of Telkom in dealing with the challenges the SA operator is facing now.

It says KT would help Telkom apply “global best practice” and transform Telkom into a “competitive next-generation operator”. In addition, SA and Korea have similar economic and social challenges, there is a good cultural fit, and the two companies are “committed to enhancing SA’s national agenda”. — Staff reporter, TechCentral