Telkom CEO Sipho Maseko has expressed interest in buying mobile operator Cell C, calling it an “interesting proposition”, according to a report by Reuters.<\/p>\n
It was first revealed in March 2015 that Cell C’s largest shareholder, Oger Telecom, was looking to sell off its 75% stake in the local operator.<\/p>\n
The group’s chairman said the decision to sell the stake in Cell C was triggered by the Independent Communications Authority of SA\u2019s revised termination rates.<\/p>\n
In February, Bloomberg reported that Cell C was working with Goldman Sachs to explore its options in SA, including a possible sale.<\/p>\n
Citing sources familiar with the matter, Bloomberg said a possible sale would be to \u201cdomestic competitors\u201d.<\/p>\n
Telkom has not fared well in the mobile space, with the group’s mobile unit consistently running at a loss.<\/p>\n
\u201cCell C is an interesting proposition. I\u2019d like to do something with them,\u201d Maseko said in an interview with Reuters.<\/p>\n
\u201cAt the right price, I\u2019m a buyer.\u201d<\/p>\n
This is not the first time a possible merger between the two operators has popped up.<\/p>\n
In 2013, former Cell C CEO Alan Knott-Craig confirmed that talks between the two companies<\/a>\u00a0<\/strong>had taken place – though nothing ever came of it.<\/p>\n Were Telkom to buy Cell C, it would acquire around 20 million subscribers, but would also have bought a company faced with network and financial issues.<\/p>\n Standard & Poor’s noted in July that Cell C was operating in a “high-cost environment and inflexible competitive space”, which will result in negative cash flow for the group.<\/p>\n The firm anticipates that the company will continue to rely on external funding sources through 2017.<\/p>\n Telkom, meanwhile, has been on a cost-cutting mission, and is currently in the process of cutting its workforce by 4,400 people – 2,400 of which have already left the company through voluntary packages.<\/p>\n Despite this, the group hasn’t shied away from sizeable acquisitions, having just completed a\u00a0R2.7-billion buyout of ICT firm Business Connexion.<\/p>\n SA mobile subscribers: Vodacom vs MTN vs Cell C vs Telkom<\/a><\/strong><\/p>\n Cell C breakeven in 2017?<\/a><\/strong><\/p>\nMore on mobile<\/h3>\n