Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.

Business of Tech

Telkom SA will decide on Rain merger by December

Article Image
Telkom South Africa will decide whether a merger with Rain is "a go or a no-go" by the end of December 2022.

That's according to Telkom Group CEO Serame Taukobong, who was answering a question from Connecting Africa about the possible merger of the two telcos during Telkom's interim results presentation on Wednesday.

"Currently from Rain we have received a proposal, there is no firm binding documents. The teams have been engaging to try to understand what the potential synergies or opportunities for growth are across these two organizations," Taukobong said. "So, at this point in time it's all informal conversations. We have set ourselves a target by the end of December to be at a go or no-go position."

In October, Rain, a South African data-only network operator, proposed that Telkom acquire it to "create a credible third player" to compete in South Africa. In fact, Rain made its intentions of merging with Telkom known back in August but was later forced to withdraw its proposal by the Takeover Regulation Panel.

Still hope for MTN

The Rain proposal came after news broke in July that MTN wanted to buy Telkom in a deal that would see the consolidation of the second-and third-biggest mobile operators in South Africa.

MTN decided to call it quits in October because "Telkom was not in a position to provide MTN with assurances around exclusivity." But Taukobong said Telkom was still open to MTN coming back to the negotiation table.

"With MTN as we indicated, the talks were stalled. However, the strategic imperative and rationale behind the MTN and Telkom partnership still remains intact," he told Connecting Africa. "We will be open to continue conversations further, if MTN comes back [to the table]."

Part of the appeal for MTN is likely Telkom's wholesale infrastructure subsidiary, Openserve, which has an extensive fiber network in South Africa.

When asked if Telkom would be willing to sell off Openserve on its own, Taukobong said it would not make sense.

"If you look at the story behind Openserve, its role is in helping us realize our broadband strategy. It is a core asset for us. We are definitely not considering selling a majority of Openserve," he said.

Telkom reported lower interim earnings and revenue for the six months ended September 30, 2022, due to constrained consumer spending and rising operating costs.

Related posts:

*Top image source: Rain.

— Paula Gilbert, Editor, Connecting Africa

Innovation hub

Story

SA minister says AI institute should execute ideas

South Africa's Communications and Digital Technologies minister, Khumbudzo Ntshavheni, has officially launched the country's Artificial Intelligence Institute.

Story

Connecting Africa Podcast: S2 Ep. 2 – Remittance revolution

The Connecting Africa Podcast team spoke to SendSprint founder and CEO Damisi Busari about the remittance market and how to improve the experience that Africans in the diaspora have with sending money home.

More Innovation hub

Partner perspectives

All Partner Perspectives

Africa Tech Perspectives

Story

Women in Tech: Spotlight on inclusivity with Digital Council Africa's Juanita Clark

Digital Council Africa founder and CEO, Juanita Clark, talks to Connecting Africa as part of our Women's Month series about her career and what needs to be done to make the tech industry intentionally inclusive.

Story

Women in Tech: Spotlight on legal tech with Life.file's Sinal Govender

Life.file co-founder, Sinal Govender, talks to Connecting Africa as part of our Women's Month series about her career and how we can encourage more young girls to enter the legal tech field.

Story

Digital inclusion as a catalyst for economic empowerment: Mastercard's Imelda Ngunzu

Mastercard's Imelda Ngunzu talks to Connecting Africa about how digital payment solutions and mobile money are transforming the lives of small business owners, women and marginalized groups in East Africa.

More AfricaCom perspectives

Latest video

More videos

Guest Perspectives

Story

Omdia View: July 2022

By Omdia Analysts

Kenya and Zambia move towards 5G with new spectrum allocations while Tunisie Telecom plans to shut down its 3G network - that and more in this month's Omdia View.

Story

Omdia View: June 2022

By Omdia Analysts

5G was the major news trend across Africa in June, as Orange became the first operator to launch 5G in Réunion and operators in Senegal accelerated their 5G plans despite spectrum delays.

More Guest Perspectives

Sponsored video

More videos

Flash poll

All polls

Like us on Facebook

Newsletter Sign Up


Sign Up