Fixed-line operator Telkom and Korean KT Corporation are moving towards a potential strategic venture.
Telkom this morning said the companies have “substantially” wrapped up a diagnostic review into areas of “mutual strategic and business cooperation and envisaged benefits” of a potential strategic venture between the companies.
KT and Telkom are now “cooperating to harmonise their respective findings” and agree on terms of the potential strategic venture.
“Discussions continue to be positive and collaborative, with both companies seeking to conclude a mutually beneficial transaction as soon as possible.”
In October, Telkom said it was in talks with KT, which may see the JSE-listed company sell a 20% stake to the Korean company.
KT was founded in 1981 and became a “government-funded” corporation in 1997. It was privatised in 2002. In the past 12 years, it has increased the number of lines from 4.5 million to 20 million, making telephony a universal service.
Telkom, which was privatised in 1991, currently has an installed base of about 4.3 million lines. However, the company is facing dwindling voice revenue, increasing competition and pricing pressure.
Telkom says once terms of a potential deal have been agreed to, this will be presented to both boards for approval before finalising the transaction agreements, engaging with key stakeholders and presenting the terms of the proposed deal to Telkom shareholders for approval.
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