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Telkom sees Cell C purchase as way to grow

Johannesburg - Telkom, South Africa’s biggest landline provider, sees a potential acquisition of closely held wireless company Cell C as a way to grow its own mobile-phone business.

Cell C “may be part of our solution,” chairman Jabu Mabuza said in an interview in Johannesburg on Wednesday. “Our mobile business is one that needs scale, so we’ll continue to look for opportunities.”

Telkom operates South Africa’s fourth-biggest mobile phone provider, and needs to grow the business to help offset declining revenues from its larger fixed-line unit.

Cell C, the country’s third-largest wireless carrier, is working with Goldman Sachs on a review of the company that could lead to a change in ownership, chief executive officer Jose Dos Santos said in May.

Telkom is about 40% owned by the South African government. The shares gained 0.3% to R61.68 as of 12:55 p.m. in Johannesburg, valuing the company at R32.5bn.

Cell C is majority owned by Dubai-based Oger Telecom.

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