Telkom SA SOC Ltd is considering making an offer to buy a majority stake in Cell C Pty Ltd that would lead to a combination of South Africa\u2019s third- and fourth-largest mobile-phone companies, according to people familiar with the matter.<\/p>\n
The former landline monopoly is seeking management control of the Johannesburg-based carrier, said the people, who asked not to be named as the plans are private. Pretoria-based Telkom hasn\u2019t made a final decision and the deal could yet fall through, they said.<\/p>\n
Telkom and Cell C declined to comment.<\/p>\n
Shares in Blue Label Telecoms Ltd, which owns 45% of Cell C, gained as much as 8.7%, the most since July 20, and traded 4.2% higher at R5.75 as of 11:09 a.m. in Johannesburg. Telkom fell 4.3%.<\/p>\n
A tie-up between Cell C and Telkom\u2019s mobile-phone division would create a business with about 21.5 million subscribers. That would pose a slightly greater threat to the dominance of South Africa\u2019s top two operators, Vodacom Group Ltd. and MTN Group Ltd, which have more than 70 million customers between them.<\/p>\n
Telkom has been investing heavily in mobile and data services to offset the decline in landline use, and is almost 41% owned by the government.<\/p>\n