Will Telkom be successful in buying Cell C?

According to reports, Telkom – 40% of which is owned by the South African government – is in talks to buy Cell C.

Telkom currently operates SA's fourth-biggest mobile-phone provider, Telkom Mobile. If the acquisition is successful, it will see the addition of the country's third-biggest cell phone company to its wireless unit.

Earlier this year, Telkom reported that its active mobile subscriber base had grown to just over 2.1 million subscribers. Cell C previously reported that it has 22 million subscribers. MTN has 29 million, and Vodacom some 30 million.

Saudi Arabia's Oger Telecom is Cell C's biggest shareholder, with a 75% stake in the South African mobile network. Oger Telecom has allegedly already rejected a R14 billion ($988 million) offer from Telkom for its 75% stake.

In a recent SENS announcement Telkom said:

"Shareholders are…advised that Telkom is in discussions regarding a potential transaction to acquire all of the shares of Cell C... Such transaction, if successfully concluded, may have a material effect on the price of Telkom's securities."

Telkom is currently doing due diligence, and said in a statement that it will update shareholders accordingly.

  • Stay connected, up to date and in the loop on what is happening in the world of finance and keep track of newly published expert insights and interviews with CFOs and CEOs. Become an online member and receive our newsletter, follow us on Twitter, like us on Facebook and join us on LinkedIn.