Zambia hints at fifth telco operator

A fifth telco
for Zambia?

Enough room says
industry regulator.

Sunday, Feb 23rd

KT Corp trims offer for S.Africa's Telkom stake

As Telkom struggles to keep up with other mobile operators. 

KT Corp has cut its offer for a 20 percent post-issue stake in South Africa's operator Telkom by nearly a third, bringing the total sale value down to about 3.3 billion rand.

South Korea's No. 2 mobile operator had initially intended to pay 36.06 rand per ordinary share, but has reduced the offer by 29 percent to 25.60 rand, representing a 10 percent premium to Friday's closing price, Telkom said.

The fixed-line company that is majority owned by the South African government has been struggling to keep up with bigger Johannesburg-based African mobile operators MTN and Vodacom.

Shares of Telkom, which has forecast that its earnings for the year ended March fell by at least 25 percent, are down nearly 20 percent this year.

"I think the deal itself is slightly positive for Telkom as it gives them a capital injection and they would gain from KT's knowledge base," said David Lerche, a telecoms analyst at Avior Research.

He said the deal includes an issue of 130 million new shares for KT, which would dilute the government's shareholding to 32 percent from the current 42 percent.

KT has been scouring for opportunities in Africa, Latin America and Eastern Europe seeking to grow earnings as competition back home heats up.

Battered in recent years by steadily falling fixed-line revenue and expensive blunders in Nigeria, Telkom has been looking to offset shrinking demand for its core business by pushing into new businesses and markets.

The company has also been beset by other problems at home. South Africa's competition regulator asked in February that it be fined 3.5 billion rand for an excessive pricing complaint logged back in 2004.


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