{"id":549388,"date":"2006-07-02T01:02:11","date_gmt":"2006-07-02T01:02:11","guid":{"rendered":"http:\/\/localhost:8888\/wordpress\/technology\/549388-vodafone-sizes-up-telkom.html"},"modified":"2006-07-02T01:02:11","modified_gmt":"2006-07-02T01:02:11","slug":"vodafone-sizes-up-telkom","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/technology\/549388-vodafone-sizes-up-telkom.html","title":{"rendered":"Vodafone sizes up Telkom"},"content":{"rendered":"

On Thursday, Sarin flew into SA and held several \u201cfruitful\u201d meetings with Telkom and Vodafone management. <\/font><\/p>\n

On Friday morning, Sarin met a \u201csmall, but very influential group\u201d of investors and stakeholders. These included senior representatives from the Deputy President\u2019s office and the Department of Trade and Industry, as well as the chairmen of regulatory body Icasa, public broadcaster SABC, the Public Investment Corporation (PIC) and information technology company Dimension Data.<\/font> <\/p>\n

Fixed-line operator Telkom has been described as \u201caffordable\u201d at its current value of R72-billion.<\/font> <\/p>\n

Analysts said a mystery R1.8-billion trade in Telkom shares on Thursday \u2014 representing 2.5% of market value \u2014 was another sign Telkom could be in the throes of being bought. The only shareholders who can sell such a large stake are the government, the PIC, and Elephant Consortium.<\/font> <\/p>\n

A senior industry player described how the sale could play out: Vodafone could either buy Telkom outright or a private equity company could buy it and split the assets into two. If the equity company sold Vodacom to Vodafone, then Telkom could relist its fixed-line business.<\/font> <\/p>\n

Sarin would not confirm in an interview with Business Times on Friday the possibility of Vodafone taking over Telkom. He did confirm he had \u201ca very good, fruitful\u201d meeting with Telkom\u2019s Molotsane on Thursday. This indicates the once-tense relationship between the equal partners in cellphone company Vodacom is thawing.<\/font> <\/p>\n

Analysts saw this as a signal that Vodafone could be mending bridges as it positions itself to buy Telkom. Khulekani Dlamini of Renaissance Asset Managers said Vodafone and Telkom suddenly working together indicated the global mobile giant could be planning to acquire Telkom.<\/font> <\/p>\n

\u201cVodafone is not usually overt and they don\u2019t telegraph their moves. But the fact that he [Sarin] has come here [to SA] himself suggests a takeover is in the offing,\u201d said Dlamini.<\/font> <\/p>\n

\u201cVodafone and Telkom have been uncomfortable partners so far, and now the animosity is fading it\u2019s a net positive sign of a possible takeover.\u201d<\/font> <\/p>\n

He said when he spoke to Molotsane earlier in the week, the Telkom boss\u2019s comments sounded as if Telkom being sold to Vodafone \u201cwas a possibility and something might be in the offing\u201d.<\/font> <\/p>\n

An analyst from Business Connexion (BCX), who did not want to be named as BCX is being bought by Telkom, also believed the deal could be done as Telkom was affordable.<\/font> <\/p>\n

<\/p>\n

Commenting on Vodafone\u2019s improved relationships with Telkom, Sarin said: \u201cWe\u2019re strengthening partner relationships … and you\u2019ll be seeing more co-operation and corroboration in the months and years to come. We\u2019re still thrashing out the basics on how we want to be partners, and getting alignment on where we want Vodacom to be in the future.\u201d<\/font> <\/p>\n

<\/p>\n

Telkom was equally tight-lipped, but did not refute suggestions of a takeover. Asked whether a potential sale was tabled this week, spokeswoman Lulu Letlape refused to give a yes or no answer.<\/font> <\/p>\n

\u201cMy answer to that is Telkom and Vodacom are discussing how we can ensure Vodacom becomes more profitable in the future,\u201d she said.<\/font> <\/p>\n

In a major breakthrough, Sarin indicated Vodafone had informally lifted shareholder restrictions on Vodacom, giving the local cellphone company the nod to muscle in on Africa\u2019s remaining telecommunications assets. Until now, in terms of a shareholder agreement, Vodafone has blocked Vodacom\u2019s expansion into Africa.<\/font> <\/p>\n

Sarin said Vodafone, with Vodacom, was eyeing six markets.<\/font> <\/p>\n

\u201cWe\u2019re very interested in Africa as a continent. We\u2019re going to use Vodacom as our main vehicle into Africa. It\u2019s my experience that you need to have local knowledge. Trying to expand into Africa out of Newbury [Vodafone\u2019s headquarters] is not a good idea,\u201d he said.<\/font> <\/p>\n

\u201cYes, we have this shareholder agreement, but this line that was written in the contract 10 years ago is not valid because we don\u2019t think in those terms.\u201d<\/font> <\/p>\n

<\/p>\n

The shareholder agreement prevented Vodacom expanding north of the equator. <\/font><\/p>\n

<\/p>\n

Telecoms analysts said Vodafone\u2019s surprise lifting of the restrictions was good news for Vodacom and competition in the African markets.<\/font> <\/p>\n

Commenting on Sarin\u2019s new strategy, Vodacom CEO Alan Knott-Craig said: \u201cWe welcome his comments and look forward to our first acquisition north of the equator.\u201d<\/font> <\/p>\n

Vodacom already has a footprint in the Democratic Republic of Congo, Tanzania, Mozambique and Lesotho \u2014 and dominates in South Africa. <\/font><\/p>\n

Dlamini said there were still greenfields opportunities on the continent. But he added Vodacom could no longer be a first mover and would be fighting for market share. \u201cThe ship hasn\u2019t sailed as yet in Africa.\u201d<\/font> <\/p>\n

<\/p>\n

Vodafone increased its stake in Vodacom this year by acquiring Venfin\u2019s shares in the local mobile giant, making it an equal partner with Telkom.<\/font> <\/p>\n

Speculation has been rife since then that Vodafone could buy out Telkom, as the fixed-line operator\u2019s control of Vodacom \u2014 its most lucrative investment \u2014 would be undermined.<\/font> <\/p>\n

Telkom is also facing increased competition from the second network operator. It said recently it wanted to broaden its sources of income and was looking at a full range of converged products \u2014 a \u201ctriple-play\u201d bundle of voice telephony, broadband Internet access and television.<\/font> <\/p>\n

But this strategy collides with those of the mobile operators, including Vodacom.<\/font> <\/p>\n

Inet-Bridge ||\u00a0 <\/font>Discuss this article<\/font><\/a> <\/font><\/p>\n

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\n","protected":false},"excerpt":{"rendered":"

VODAFONE head Arun Sarin and Telkom chief Papi Molotsane are in talks that could lead to the UK telecommunications giant buying Telkom.<\/p>\n","protected":false},"author":23,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[17],"tags":[],"class_list":["post-549388","post","type-post","status-publish","format-standard","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/549388"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=549388"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/549388\/revisions"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=549388"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=549388"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=549388"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}