Telkom and the South African government are in advanced talks to partner in rolling out broadband products even as buyers flock to bid for the telecommunication company\u2019s assets.<\/p>\n\n\n\n
The partnership will involve Telkom\u2019s businesses, such as the Openserve fibre unit, the government\u2019s Broadband Infraco, and broadcast transmission services provider Sentech, Minister of Communications and Digital Technologies Mondli Gungubele said.<\/p>\n\n\n\n
\u201cWe have almost agreed on how the partnership will work; we are at modalities now,\u201d Gungubele said in an interview at Telkom\u2019s office in Pretoria. The government isn\u2019t interested in selling its 40% stake in Telkom, the minister said.<\/p>\n\n\n\n
Telkom, which reported its first loss in a decade in the year ended March 31, has seen a flurry of proposals to acquire the company\u2019s assets just as South Africa\u2019s third-largest wireless company warned of a potential asset writedown of about R13 billion.<\/p>\n\n\n\n
The latest offer saw the firm\u2019s former Chief Executive Officer Sipho Maseko offering to acquire a 35% stake in Telkom, with partners Axian Telecoms and the Public Investment Corporation to form a larger African infrastructure and telecommunications business. MTN Group Ltd., Africa\u2019s largest wireless carrier, also made an offer for Telkom last year.<\/p>\n\n\n\n
\u201cWe cannot stop people from being interested in Telkom,\u201d Chairman Geoffrey Qhena said in the interview along with the minister. \u201cWhen the share price is low, people want to take advantage.\u201d<\/p>\n\n\n\n
The company\u2019s shares, which have risen 3.3% this year, dropped 0.2% at 9:50 a.m. in Johannesburg. Telkom in March said it was seeking to sell a stake in Openserve and hired Bank of America Corp. to gauge interest from investors.<\/p>\n\n\n\n
Openserve operates around 170,000 kilometres (106,000 miles) of fibre and legacy landline copper cables. The government\u2019s Broadband Infraco manages 14,862 kilometres of fibre, making it the second-largest fibre network operator in the country, according to its annual report.<\/p>\n\n\n\n
The new partnership would assist the government fulfil its ambitions to connect 80% of South Africans in the next three years, Gungubele said, without giving details.<\/p>\n\n\n\n
\u201cThe relationship we have with Telkom as a shareholder has huge potential to turn the country\u2019s future around,\u201d the minister said.<\/p>\n\n\n\n