Telkom still on acquisition trail

By Iain Scott for Telkom

Johannesburg, 06 Jun 2006

Telkom will continue to pursue acquisitions both within and without SA, but only when there is a strong business case, says CEO Papi Molotsane.

Speaking in Midrand at yesterday`s presentation of the network operator`s latest financial results, Molotsane said the acquisition strategy would focus on data as well as mobile/fixed-line beyond SA`s borders.

However, the group would enter only those countries with potential for high returns and which provided a good regional or business fit.

"We have no other alternative but to grow our business and look for new revenue streams," Molotsane said.

He stressed that acquisitions had to be compatible with Telkom`s aim to become a leading ICT services provider.

Preferred bidder

"We have been told that we are the preferred bidder [for Nigeria`s Nitel], but I want to stress that we have conditions, such as the business case.

"We will not move if those conditions are not met. We will not move unless it makes sense."

The group is in the process of acquiring local business solutions integrator Business Connexion (BCX), with BCX shareholders set to vote on the deal at a scheme meeting next week.

Molotsane says the acquisition is compatible with Telkom`s strategy, as "this is where the telecoms industry is going to".

Telkom is on a drive to broaden itself into an ICT solutions service provider as it faces increasing competition in the local market as the telecoms environment becomes increasingly liberalised.

Reuters reports that Telkom is also considering bidding for a licence in Kenya and would contemplate acquiring Portugal Telecom`s African assets if they are put on the market.