Telkom spokesperson Noma Faku told MyBroadband that the company is not currently in discussions with MTN regarding a merger.
This follows a Sunday Times report that MTN South Africa and Telkom held discussions regarding a possible merger.
Links between the two companies are not new. In 2015, MTN considered an acquisition of a majority stake in Telkom to challenge Vodacom’s dominance in South Africa.
Telkom also has a roaming agreement with MTN, and in 2014 the companies announced a planned network-sharing agreement.
The network-sharing deal was stopped after the Competition Commission recommended that the bilateral roaming agreement should not be approved.
MTN-Telkom deal makes sense
A merger between the companies makes sense, as it will create a telecoms powerhouse in South Africa with tremendous scale.
It will combine MTN’s strength in the mobile market and Telkom’s dominance in the fixed-line and fibre arena.
This scale will provide the companies with a competitive advantage in South Africa in both the fixed and mobile markets.
This, however, is the reason why such a merger will not be approved by the Competition Commission – it will reduce competition and create a strong, dominant telecoms player.
MTN South Africa’s executive for corporate affairs Jacqui O’Sullivan previously told MyBroadband they remain in talks with Telkom regarding its roaming agreement.
“Reports regarding further discussions between the two operators are conjecture and MTN chooses not to comment on market speculation,” she said.