Telkom has sold its pan-Africa business, iWayAfrica and Africa Online Mauritius, which was an immaterial part of the Group, through a private sale to Gondwana International Networks.
Telkom CEO Sipho Maseko says the transaction is one of many initiatives that will contribute to the company's turnaround, allowing it to focus on its core South African fixed-line and mobile operations. "We are also pursuing several other initiatives in a coordinated manner to restore Telkom's financial health."
iWayAfrica was formed as the result of the amalgamation of MWeb Africa and Africa Online in 2007 when MWeb Africa was purchased by Telkom.
Maseko says Telkom has struggled to drive growth and profitability in the iWayAfrica business since it was acquired.
"Several years of poor performance of the iWay Group has resulted in continued negative earnings before interest, taxes, depreciation and amortisation contribution to the Telkom group."
Maseko says Telkom believes Gondwana has the tangible experience of managing and owning Internet service providers (ISPs) on the African continent and believes that this is beneficial in taking the business forward.
Referring to the purchase - concluded in the late afternoon on Friday - Gondwana International Networks indicated that their acquisition is a long term investment.
Gondwana CEO Mathew Welthagen says the company intends to invest heavily in the business in the future.
"We see the opportunities this offers us as essential to form a platform for our growth in the lucrative, albeit difficult ISP markets in Africa, and we are confident that we will be in a position to expand this moving forward.
"By applying sound business principles and focussing on skilled resources within the specific country territories, we are confident that we can positively turnaround the iWay business in the short term and provide significant growth thereafter."
The iWayAfrica business operates in eight countries on the continent offering terrestrial wireless and VSAT services to business and residential markets as well as via its channel partners in many other countries on the continent.
Maseko says it is important to note that Telkom's investment in iWayAfrica was already fully impaired during the 2012 financial year and a sale at this time made perfect sense.
"We have spent the year concentrating our efforts on stabilising our South African business and our focus now is on reviving Telkom SA's full performance potential," he concluded.
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