Telkom suspends Mvela talks, Vodafone talks ongoing

Tag : mobile cdma phone

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JOHANNESBURG, Sept 18 (Reuters) - South African fixed-line phonefirm Telkom <TKGJ.J> suspended talks with a consortium led byMvelaphanda Holdings <MVGJ.J>, citing price considerations.
Telkom, Africa's biggest fixed-line telephone company, said it wasstill in talks with Britain's Vodafone <VOD.L> to buyTelkom's stake in Vodacom Group, the country's biggest mobile phoneoperator.
"(Telkom) and the (Mvelaphanda) consortium have jointly agreed tosuspend discussions in response to current market conditions andpricing considerations," said Telkom in a statement after the localmarket closed.
Mvelaphanda Holdings and U.S.-based Och-Ziff Capital ManagementGroup and other strategic allies were considering making an offerfor the entire share capital of Telkom.
Their offer was subject to Telkom unbundling its entire 50 percentstake in Vodacom.
"The Mvelaphanda deal looked complicated," Richard Hurst, atelecoms analyst at global advisory firm IDC, said.
"My concern is what it means for Telkom, while talks are ongoingwith Vodafone concerning the sale of Vodacom stake. It couldcomplicate issues further."
Vodacom's growth path has been derailed by a shareholder agreementbetween Telkom and Vodafone that limited the mobile operator'sexpansion in sub-Saharan markets. Telkom said the planned disposalof its 50 percent stake in Vodacom would enable it to re-enter themobile voice market.
Vodafone, which holds the other 50 percent of Vodacom, has offeredto buy a further 12.5 percent stake in Vodacom for 18.75 billionrand ($2.29 billion).
"I think (Telkom) will press ahead with the Vodafone deal," Hurstsaid, but warned that Telkom had to look for new mobile assets orgrowth somewhere else.
To deal with possible loss of revenue from the disposal of itsstake in Vodacom, Telkom was planning a 1.7 billion rand investmentin W-CDMA technology to provide it with mobile data, as well asfixed and nomadic voice capability.
Meanwhile, local newspaper reports earlier this month reported thatprivately owned Nigerian telecoms firm Globacom was in talks aboutforming a partnership with Vodacom. But Telkom denied this.(Reporting by Gugulakhe Lourie; editing by Elaine Hardcastle)