Telkom could still be in the running for a stake in Uganda Telecom, after press reports emerged that the Liberian government had not sewn up the deal, say analysts.
Earlier this month, Ugandan publication NewVision reported Libya Africa Portfolio's (LAP's) Green Com had acquired majority shares in Uganda Telecom. It quoted sources as saying the investment arm of the Libyan government acquired 51% shareholding in Uganda Telecom after buying out Ucom.
The publication also said Telkom had pulled out of the deal. However, it has since emerged the Ugandan telecoms firm has not been acquired, either by LAP or any other company.
NewVision quotes Mark Kaheru, the company's marketing communications officer: "This is not factual. Uganda telecom has not been acquired by LAP or any other entity." He says negotiations are still under way.
Unconfirmed
Telkom says it is not providing any "further" comment on the issue.
An analyst says he has been unable to confirm Telkom has pulled out of a possible deal, indicating it could still be in the running. He says he cannot see a reason for the company to pull out of the deal, unless Telkom found something unfavourable during due diligence, although he doubts this.
In January, Telkom confirmed it was in acquisition discussions with a Ugandan telecommunications operator after NewVision quoted Uganda Telecom's corporation secretary Donald Nyakairu as saying discussions were at price-negotiation stage.
Another analyst, who also had not confirmed Telkom was no longer in the running, says he is not in favour of the R3 billion deal. He says the Ugandan market is less than 2% of the size of the local fixed-line market. "Telkom would get poor assets and it won't make a difference to its revenue line."
African strategy
Telkom previously said it was seeking to grow into Africa and released a shortlist of five targeted African countries: Angola, Botswana, the Democratic Republic of Congo, Kenya and Nigeria. CEO Papi Molotsane - last April - said the company was looking at a number of opportunities, including Nigeria. "Nigeria is a market that you cannot ignore."
BMI-TechKnowledge senior telecoms analyst Richard Hurst says Telkom would be likely to look at fixed-line operators with mobile licences when executing its expansion plans into Africa. Ucom owns 51% of Uganda Telecom, which is reported to have about 500 000 mobile phone subscribers and 100 000 fixed-line subscribers, in a country of 27 million people.
Hurst adds that while several countries may seek to liberalise, the race for mobile licences has run it course. Telkom's best option is to seek growth through acquisition and to target low hanging fruit such as fixed-line operators like Angola Telecom, he says. "However, in this instance, we my find Telkom is not the only suitor, as has been the case in Uganda and elsewhere," he says.
Related story:
Telkom confirms Ugandan move
Share
