Telkom CEO Serame Taukobong recently said the state-owned telecommunications operator is open to further discussions with MTN Group about a transaction.
This comes a month after MTN terminated talks about an MTN-led proposal to buy Telkom after Telkom said it was entertaining an offer from Rain.
At Telkom’s interim results investor presentation on Wednesday, 23 November, Taukobong said the talks with Rain remain informal. However, the parties have agreed to decide whether it’s a “go or no-go position” before the end of December.
On MTN, Taukobong said: “The strategic rationale [for a deal] remains intact, and we are open to further conversations if MTN comes back [to the table].”
Revealing the end of the discussions with MTN last month, Telkom said the talks hadn’t advanced beyond an early stage, that no due diligence had taken place and that MTN had made no binding offer to Telkom’s board.
At the time, MTN said, “After extensive engagements and deliberations between the parties, shareholders are advised that the discussions regarding the proposed transaction have terminated, as the parties were unable to reach an agreement to their mutual satisfaction on the process going forward.”
According to industry analysis, an acquisition by MTN of Telkom would have very high regulatory hurdles to clear, diminishing its chances of success. Not only would there have to be difficult discussions around the pooling of the two companies’ spectrum assets, but the Competition Commission would also likely launch an in-depth probe into such a deal and its likely impact on competition in South Africa’s telecoms industry.
Analysts said MTN is likely most keen to access Telkom’s wholesale business, Openserve, which has an extensive fibre network into homes and businesses.