Telkom up for grabs

[AdLo]

The Telkom board will consider bids for its fixed-line phone business and its 50% stake in cellphone giant Vodacom when it gathers for its annual meeting next month.

Business Times has established that Telkom, which is partly state-owned and has a market capitalisation of about R97-billion, has received two offers for its telecommunications assets.

Cellphone group MTN — with a market cap of R184-billion, almost double that of Telkom — and a private consortium are making a play for Telkom’s fixed- line business and its stake in Vodacom.

Both have already sent their offers to Telkom, but have been told to improve their bids and resubmit them for consideration at the coming board meeting.

...

Business Times has learnt that Telkom is close to concluding the sale of its Vodacom stake to its current partner Vodafone, which has pre-emptive rights to buy the half-share.

Telkom could pocket more than R70-billion from the sale of its Vodacom stake.

A source close to the deal said: “Things are moving quite quickly. They will definitely sell their stake in Vodacom soon, before they decide on the sale of their fixed-line assets.”

http://www.sundaytimes.co.za/Business/Article.aspx?id=553341

 

[GavinMannion]

I am unsure how to feel about this but I guess it can only be good if someone like MTN wins. It will force Vodacom to keep up with it's local broadband offering...

 

[bwana]

Surely the competition commission would quash any notion of MTN owning half of their competitor?

 

[AdLo]

Surely the competition commission would quash any notion of MTN owning half of their competitor?

Legislation says that cellular operators many not have shares in each other hence Telkom wanting to sell the 50% stake in Vodacom to Vodaphone.

It's ironic that before Telkom gets fixed line competition or the local loop is unbundled it looks like it will be sold itself.

 

[noswal]

If Telkom sells off its stake in Vodacom and its fixed-line network, the company would become an empty shell, holding billions of rands in cash

If Telkom fixed line is sold...who or what entity is it that gets the money and what becomes of it?

 

[Ozymandias]

Don't know if MTN buying Telkom will be good for the market. Stomping up 80-90 Billion Rands for Telkom would require a big player with deep pockets. Decreasing the number of players in the market would not be good for competition and the the cost of telecomms in SA. I can't see the government wanting to allow a foreign investor taking Telkom after they failed to control SBC/Telecom Malaysia and Mittal taking our economy for a ride.

 

[LabAnimal]

Well, as long as crazy Chinese Mathematicians in Telkom gets retrenched when the deal goes thru, and the prices actually drop alot more !.

 

[Sneeky]

Need to think about this one for a bit
Not so sure a sale to either is good at this stage.
Initial thoughts, only good if government offloads their 38% share as well as the PIC.
They have already raped us enough ffs.

The TELKOM brand taste like bile to many South Africans, changing that is almost impossible, might as well kill it off.

 

[bekdik]

Insider knowledge says SAIX is high up on the list ...

 

[kevinswan007]

funny how this is happening now when telkom was just about to comply with ICASA and uncap local. so whats going to happen now? there will be a 2 year debate on telkoms future, and nothing will be done about local and international bandwidth separation, just watch!! politics, F@$!! drives me nuts!!!

 

[AdLo]

The monopoly is putting up the for sale signs before governments half hearted competition gets introduced. Telkom was just a money making scheme from the start with the main purpose of screwing South Africa and making investors including government rich.

Double privitization of a monopoly making government doubly as rich.
That's South African telecoms for you.

 

[|tera|]

Mark my words, they won't sell

 

[AdLo]

Mark my words, they won't sell

Why then instead of selling would they ask for higher bids?

Time to cash in on those monopoly chips.

 

[|tera|]

Why then instead of selling would they ask for higher bids?

Time to cash in on those monopoly chips.

It's a way to seem like they want to sell, but it won't be realised. The same thing happened a couple of years ago when they went on the NY stock exchange, all the rumours were there that they would sell, but figarol happened.

 

[AdLo]

Well if the local loop is going to get unbundled (eventually) then what will the purpose of Telkom be. Their service is shocking, their employees are demotivated and the company motto is greed. IMO they will want to sell but will the competition authorities allow it.
That's the real question.

 

[noswal]

Start phoning all the free telkom numbers and whichever telkom employee answers say... "I read in the Sunday Times that Telkom is being sold, I hope you wont lose you job..." see the rumors fly

 

[|tera|]

Start phoning all the free telkom numbers and whichever telkom employee answers say... "I read in the Sunday Times that Telkom is being sold, I hope you wont lose you job..." see the rumors fly

Good one man I like

 

[fskmh]

This is disturbing news. This deal should be blocked by the competition commission - we need opening of the telecomms market, not consolidation.

In addition to pocketing the cash, analysts say government will boast that selling Telkom’s assets proves how pro-active it is in liberalising the market.

*kaching kaching*
No doubt there will be more instant millionaires but where is the upside for the customers paying for this gravyfest? So the fixed-line monster gets canabalised by one of the two large mobile players and we end up with a de facto duopoly that cannot even port a mobile no. without making the customer suffer for the crime of trying to get a better deal?

The way would be opened for government’s new broadband baby Infraco, second network operator Neotel and Sentech to drive the government’s telecoms agenda.

So they don't have to change the law anymore, what a relief, how very... coincidental?

The private consortium is headed up by businessman Barend Hendricks, who was instrumental in facilitating the sale of Telkom shares to the controversial, politically connected Elephant empowerment group.

http://www.sundaytimes.co.za/SpecialReports/PresidentialSuccession/Article.aspx?id=297264

THE ANC is developing a radical new policy that will limit the number of empowerment deals its members and their spouses may make as new evidence emerged that the party’s executives are richer than ever.

Must be time to cash-out before the "radical new policy" .

 

[thesuspect]

It is strange how everyone who hates Telkom suddenly whistles a different tune when they realize it isn't such a good idea to get rid of Telkom. That would mean MTN would own Telkom and Vodafone will belong to the Brits. In my books that means even less competition.

Anyway, I cant see a deal like that being approved. I mean, Telkom (telecommunications) buying BCX (IT) was block because it would strangle competition. How then could MTN (telecommunications) buy Telkom (telecommunications) without killing competition. Oh, I forgot. It only counts if the ruling is against Telkom.

 

[AdLo]

It is strange how everyone who hates Telkom suddenly whistles a different tune when they realize it isn't such a good idea to get rid of Telkom. That would mean MTN would own Telkom and Vodafone will belong to the Brits. In my books that means even less competition.

Anyway, I cant see a deal like that being approved. I mean, Telkom (telecommunications) buying BCX (IT) was block because it would strangle competition. How then could MTN (telecommunications) buy Telkom (telecommunications) without killing competition. Oh, I forgot. It only counts if the ruling is against Telkom.

It's not that I'm whistling a differnent tune but just that I personally want to see Telkom employees and management get the shock of their lives when they realize how awful their service is when they eventually get competition if and when the local loop gets unbundled.

It's always nice to see the bad guy get what's coming to him.
Telkom selling itself would deny me the pleasure of watching them implode.