Vodafone's £5bn Telkom South Africa bid faces opposition
There were indications on Monday that Vodafone's bid to gain control of Vodacom of South Africa has been hit by local political opposition and wrangling over the sale price.
Telkom, which jointly owns Vodacom with Vodafone confirmed last week that it was holding talks with Vodafone about a possible sale of its stake in Vodacom, for a price reported to be worth £5 bn.
However, Times Online suggested in a report that the deal may not see the light of the day due to the huge political ramifications it would have. First problem that the deal could run into is that the proposal by Telkom to sell off its fixed-line assets to the MTN Group.
Analysts believe that the move to sell its fixed-line as well as its mobile assets would reshape South Africa's telecoms industry and even the continent as it would spell the end of Telkom and create a new national and possibly a continent champion in the form of the enlarged mobile/fixed-line giant MTN.
The planned deal is expected to trigger strong political opposition and a strong reaction from unions, which fear widespread job losses at Telkom.
As a result, there are doubts that the South African government, which has a direct 38 per cent stake in Telkom and a further 15 per cent through the Public Investment Corporation, would approve a sale of the group's fixed-line assets.
\u003c/span\>\u003c/p\>\n\u003cp\>\u003cspan lang\u003d\"EN\"\>\u003cfont face\u003d\"Times New Roman\"\>Will Hahn, a specialist in South Africa at Gartner, the research group, said: "The Government has resisted so many calls to privatise Telkom it seems puzzling it would just give in to MTN's plans."\n\u003c/font\>\u003c/span\>\u003c/p\>\n\u003cp\>\u003cspan lang\u003d\"EN\"\>\u003cfont face\u003d\"Times New Roman\"\>Backers of the plans say that the South African Government is likely to have recognised the proposals as the only feasible route to creating a strong fixed/mobile provider capable of providing the "converged" services now deemed critical by telecoms players.\n\u003c/font\>\u003c/span\>\u003c/p\>\n\u003cp\>\u003cspan lang\u003d\"EN\"\>\u003cfont face\u003d\"Times New Roman\"\>Attempts to exploit its mobile operation to provide bundled services have proved difficult for Telkom. It is understood that relations between it and Vodacom, and also with Vodafone, have been strained.\n\u003c/font\>\u003c/span\>\u003c/p\>\n\u003cp\>\u003cspan lang\u003d\"EN\"\>\u003cfont face\u003d\"Times New Roman\"\>Vodafone and Telkom are thought to have disagreed on strategy while Vodafone, which has first right of refusal on Telkom's Vodacom stake, is thought to have made clear that it would not sell out of the business. There is also understood to be a significant gulf in the price that Vodafone is prepared to pay and what Telkom wants.\n\u003c/font\>\u003c/span\>\u003c/p\>\n\u003cp\>\u003cspan lang\u003d\"EN\"\>\u003cfont face\u003d\"Times New Roman\"\>Those championing the deal believe that union sentiment could be helped by the fact that MTN's chairman, Cyril Ramaphosa, is the former head of the National Union of Mine-workers, the biggest South African trade union.\n\u003c/font\>\u003c/span\>\u003c/p\>\u003c/div\>\n",0]
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Will Hahn, a specialist in South Africa at Gartner, the research group, said: "The Government has resisted so many calls to privatise Telkom it seems puzzling it would just give in to MTN's plans."
Backers of the plans say that the South African Government is likely to have recognised the proposals as the only feasible route to creating a strong fixed/mobile provider capable of providing the "converged" services now deemed critical by telecoms players.
Attempts to exploit its mobile operation to provide bundled services have proved difficult for Telkom. It is understood that relations between it and Vodacom, and also with Vodafone, have been strained.
Vodafone and Telkom are thought to have disagreed on strategy while Vodafone, which has first right of refusal on Telkom's Vodacom stake, is thought to have made clear that it would not sell out of the business. There is also understood to be a significant gulf in the price that Vodafone is prepared to pay and what Telkom wants.
Those championing the deal believe that union sentiment could be helped by the fact that MTN's chairman, Cyril Ramaphosa, is the former head of the National Union of Mine-workers, the biggest South African trade union.
Telkom, which jointly owns Vodacom with Vodafone confirmed last week that it was holding talks with Vodafone about a possible sale of its stake in Vodacom, for a price reported to be worth £5 bn.
However, Times Online suggested in a report that the deal may not see the light of the day due to the huge political ramifications it would have. First problem that the deal could run into is that the proposal by Telkom to sell off its fixed-line assets to the MTN Group.
Analysts believe that the move to sell its fixed-line as well as its mobile assets would reshape South Africa's telecoms industry and even the continent as it would spell the end of Telkom and create a new national and possibly a continent champion in the form of the enlarged mobile/fixed-line giant MTN.
The planned deal is expected to trigger strong political opposition and a strong reaction from unions, which fear widespread job losses at Telkom.
As a result, there are doubts that the South African government, which has a direct 38 per cent stake in Telkom and a further 15 per cent through the Public Investment Corporation, would approve a sale of the group's fixed-line assets.
\u003c/span\>\u003c/p\>\n\u003cp\>\u003cspan lang\u003d\"EN\"\>\u003cfont face\u003d\"Times New Roman\"\>Will Hahn, a specialist in South Africa at Gartner, the research group, said: "The Government has resisted so many calls to privatise Telkom it seems puzzling it would just give in to MTN's plans."\n\u003c/font\>\u003c/span\>\u003c/p\>\n\u003cp\>\u003cspan lang\u003d\"EN\"\>\u003cfont face\u003d\"Times New Roman\"\>Backers of the plans say that the South African Government is likely to have recognised the proposals as the only feasible route to creating a strong fixed/mobile provider capable of providing the "converged" services now deemed critical by telecoms players.\n\u003c/font\>\u003c/span\>\u003c/p\>\n\u003cp\>\u003cspan lang\u003d\"EN\"\>\u003cfont face\u003d\"Times New Roman\"\>Attempts to exploit its mobile operation to provide bundled services have proved difficult for Telkom. It is understood that relations between it and Vodacom, and also with Vodafone, have been strained.\n\u003c/font\>\u003c/span\>\u003c/p\>\n\u003cp\>\u003cspan lang\u003d\"EN\"\>\u003cfont face\u003d\"Times New Roman\"\>Vodafone and Telkom are thought to have disagreed on strategy while Vodafone, which has first right of refusal on Telkom's Vodacom stake, is thought to have made clear that it would not sell out of the business. There is also understood to be a significant gulf in the price that Vodafone is prepared to pay and what Telkom wants.\n\u003c/font\>\u003c/span\>\u003c/p\>\n\u003cp\>\u003cspan lang\u003d\"EN\"\>\u003cfont face\u003d\"Times New Roman\"\>Those championing the deal believe that union sentiment could be helped by the fact that MTN's chairman, Cyril Ramaphosa, is the former head of the National Union of Mine-workers, the biggest South African trade union.\n\u003c/font\>\u003c/span\>\u003c/p\>\u003c/div\>\n",0]
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Will Hahn, a specialist in South Africa at Gartner, the research group, said: "The Government has resisted so many calls to privatise Telkom it seems puzzling it would just give in to MTN's plans."
Backers of the plans say that the South African Government is likely to have recognised the proposals as the only feasible route to creating a strong fixed/mobile provider capable of providing the "converged" services now deemed critical by telecoms players.
Attempts to exploit its mobile operation to provide bundled services have proved difficult for Telkom. It is understood that relations between it and Vodacom, and also with Vodafone, have been strained.
Vodafone and Telkom are thought to have disagreed on strategy while Vodafone, which has first right of refusal on Telkom's Vodacom stake, is thought to have made clear that it would not sell out of the business. There is also understood to be a significant gulf in the price that Vodafone is prepared to pay and what Telkom wants.
Those championing the deal believe that union sentiment could be helped by the fact that MTN's chairman, Cyril Ramaphosa, is the former head of the National Union of Mine-workers, the biggest South African trade union.
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