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Johannesburg - Telkom [JSE:TKG], South Africa's biggest landline provider, said on Wednesday that it remained in talks with telecommunications operator MTN to extend their roaming agreement to include the outsourcing of Telkom's radio access network.
Telkom said in November that such a move would give both operators larger voice and data capacity at a lower price and that it hoped to conclude the proposal within this financial year which ends on March 31.
In March 2014, Telkom and MTN signed Heads of Agreement (HoA) that outlined intentions to conclude network sharing and roaming agreements.
Talks have been underway for MTN to manage the financial and operational responsibility for the rollout and operation of Telkom’s radio access network (RAN). Both telecom players are also in talks regarding roaming on either party’s network.
MTN, though, is not expected to gain access to Telkom’s LTE or 4G broadband spectrum in the 2,3GHz frequency band.
Telkom has previously said it hoped to conclude the proposal within the financial year, which ends on March 31 2015.
“Shareholders are referred to the various cautionary announcements published on the Securities Exchange News Service of the JSE Limited, the last of which was released on 17 November 2014,” read the Telkom announcement.
“Shareholders are further advised that Telkom and MTN South Africa remain in discussions regarding the potential extension of their existing roaming agreement to include bilateral roaming and outsourcing of the operation of Telkom’s radio access network, which if successfully concluded may have a material effect on the price of Telkom’s securities.
“The parties will update shareholders as soon as they receive the appropriate legal and regulatory approvals,” the statement added.
Opposition to possible deal
Local technology publication TechCentral reported earlier this year that South Africa’s third largest mobile network by subscriber numbers Cell C expressed its opposition to the potential Telkom-MTN deal.
“Cell C has been asked to comment on the proposed transaction by the Competition Commission (CompCom) … on the face of it, and as Cell C understands the proposed transaction, we do not agree with it,” TechCentral quoted Cell C CEO Jose Dos Santos as saying.
Other mergers and acquisitions
The possible Telkom-MTN deal is not the only one facing opposition in the industry.
MTN earlier this year lodged its opposition to a planned merger between JSE-listed Vodacom and fixed line operator Neotel.
Vodacom is eyeing Neotel’s fixed line network as well as additional spectrum to help it roll-out more mobile broadband services such as LTE or 4G.
“MTN can confirm that it has raised certain concerns with the Competition Commission and the Independent Communications Authority of South Africa (Icasa) regarding the proposed transaction, MTN will not comment further on the matter,” an MTN spokesperson told Fin24 in November.
Meanwhile, Telkom is also awaiting regulatory approval for its proposed merger with African cloud specialists Business Connexion (BCX).
