Telkom surged through the R30 a share level on the JSE on Wednesday (8 January) as investors await news on the future of its mobile arm, Telkom Mobile.<\/p>\n
In afternoon trade on the JSE, Telkom advanced 4.2% or R1.23, to R30.49 – the first time the telco has broken through the R30 level in more than two years.<\/p>\n
The All Share Index meanwhile, remained flat, at 45,856 points.<\/p>\n
In November,\u00a0Sipho Maseko, Group CEO at Telkom, admitted\u00a0that the Telkom Mobile business was going through \u201ca very difficult time\u201d, and is in discussions with\u00a0parties over future operations.<\/p>\n
Maseko stressed that Telkom would continue to be a full-service operator.<\/p>\n
The group was subsequently linked to talks with Cell C and MTN, although neither operator confirmed any discussions had taken place.<\/p>\n
Asked by\u00a0BusinesTech whether\u00a0Cell C was in talks with Telkom Mobile over a merger, Jose Dos Santos, Cell C chief commercial officer, and Acting CEO said:\u00a0\u201cMarket consolidation is inevitable. Consolidation will help smaller operators build scale to compete more effectively with players that have significant market power.\u201d<\/p>\n
\u201cThere is likely to be some form of consolidation or partnership in the industry. However, any decisions on consolidation or future partnerships involving Cell C would be for our shareholders to decide upon.\u201d<\/p>\n
MTN said that, while it does\u00a0engage with\u00a0Telkom as part of normal business practice, it would not speculate on a possible merger deal with Telkom Mobile.<\/p>\n
An analyst told BusinessTech that Telkom’s jump on Wednesday\u00a0may be as a result of the R30 resistance level turning into a support; however, he noted that technically the share is overbought.<\/p>\n
Other analysts said that a jump in share price, supported by good volumes often pre-empted an important announcement.<\/p>\n
An investment in Telkom a year ago would have delivered\u00a0a 77.92% return today, with the group having reached an all time worst trade of \u00a0R11.34 in May 2013.<\/p>\n
In November,\u00a0Telkom reported a marginal increase (0.3%) in\u00a0operating revenue for the six months ended September 2013, to R16.2\u00a0billion.<\/p>\n
The group pointed to headline earnings per share of 224.2 cents from 101.1 cents in the prior reporting period.<\/p>\n
Profit after tax increased 41.1% to R773 million, but\u00a0EBITDA decreased 0.4% to R3.9 billion.<\/p>\n
MTN mum on Telkom Mobile talks<\/strong><\/a><\/p>\n MTN Telkom talk rumours re-emerge<\/strong><\/a><\/p>\n Cell C hints at Telkom Mobile merger<\/strong><\/a><\/p>\n