Johannesburg - Cell C, South Africa’s third-largest wireless operator, told the country’s Competition Commission that it opposes a network-sharing deal between MTN and Telkom.
“As Cell C understands the proposed transaction, we do not agree with it,” chief executive Jose Dos Santos said in an e-mailed response to questions late yesterday.
The anti-trust regulator asked Cell C to comment on the proposal, he said.
Telkom, Africa’s biggest landline provider, said in March it’s in talks with MTN about sharing mobile-phone networks.
A deal between the two South African carriers could help Telkom reduce the cost of its wireless business while giving MTN, the continent’s largest mobile operator, access to some of Telkom’s spectrum, a person familiar with the matter said at the time.
Pynee Chetty, a spokesman for Telkom, and MTN spokeswoman Bridget Bhengu weren’t immediately available to comment on Cell C’s opposition to their proposal when contacted by phone and e-mail.
A successful deal between the two companies would help expand their existing agreement to allow roaming on each other’s networks.
Battling Costs
Telkom is battling to reduce costs to offset a decline in landline use, increased operating expenses and a performance that has trailed competitors, chief executive Sipho Maseko said in a presentation to investors last month.
The Pretoria-based company is also trying to reduce expenditure at its mobile business, the country’s fourth biggest behind MTN, Vodacom and Cell C.
Telkom shares increased 2.3 percent to 61.57 rand at the close in Johannesburg, valuing the company at 32 billion rand.
The stock has more than doubled this year, making it the best-performing stock on the FTSE/JSE Africa All- Share Index.
MTN shares fell 0.6 percent to 257.55 rand.
The competition commission, which describes the talks on its website as a possible merger, is examining the proposals, spokesman Mava Scott said by phone yesterday.
MTN South Africa’s general manager of regulatory affairs, Graham De Vries, and Telkom both said in separate e-mailed statements that the Competition Commission’s actions are part of normal practice. - Bloomberg News