MTN not pursuing Telkom SA buyout

Telecommunications company MTN's Group CEO Ralph Mupita has refuted rumors that there are fresh merger talks between MTN and Telkom South Africa.

Mupita shared these sentiments at a media roundtable in Johannesburg following the release of its interim financial results for the six months ended June 30, 2023, published on Monday.

"There are no talks. As we speak, our view remains that consolidation is needed in this sector. It often sounds like it's about self-interest, but I believe that fewer players can invest more. But there is nothing on the table and our consolidation view has not changed," he explained.

Amid a difficult operating environment and evolving technological advancements, Telkom has been looking to sell off some of its assets.

The pending nuptials between the two SA operators started in August 2022, when both acknowledged that MTN wanted to buy Telkom, and that talks were in the early stages.

However, a spanner was thrown in the works when another local operator, Rain, offered its network up to Telkom SA to buy, in a move that stood in the way of MTN's plans.

That led to MTN walking away from talks on the acquisition in October 2022.

Consolidation is key in telco sector

When probed about a recent Competition Commission (CompCom) recommendation that Vodacom's acquisition of a stake in South African fiber operator MAZIV be blocked, Mupita said he was surprised by the ruling. In his view, consolidation in the telecommunications industry is inevitable.

"Reflecting on the CompCom's decision, I thought that the issue everyone is trying to solve is that the customer must always be connected. We use different access technologies to enable that, and what we are seeing is the need to consolidate," he added.

MTN believes that consolidation in the telecommunications sector is inevitable to ensure that customers are always connected. (Source: MTN Group)

He said the industry has not done enough to return the cost of investment to shareholders, and therefore, consolidation is key.

"We see globally, and in other markets, such partnerships providing access to technology and needed services in the home or on the go. Our stance on consolidation remains intact, and it has been reinforced by what we see happening in markets such as the USA, UK, and Spain," he continued.

"The theme of consolidation is a response to the market itself moving towards fixed-mobile convergence at a time when there is a move from 4G to 5G. We think that consolidation is inevitable on the African continent as well as in South Africa," Mupita concluded.

*Top image is of Ralph Mupita, MTN Group president and CEO. (Source: MTN Group.)

— Matshepo Sehloho, Associate Editor, Connecting Africa