Chris Spillane
CELL C was opposed to a network-sharing deal between MTN and Telkom, South Africa’s third-largest cellular operator has told the Competition Commission.
“As Cell C understands the proposed transaction, we do not agree with it,” chief executive Jose dos Santos said in response to questions late on Tuesday.
The Competition Commission had asked Cell C to comment on the proposal, he said.
Telkom, Africa’s biggest landline provider, said in March that it was in talks with MTN about sharing cellular networks.
A deal between the two 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 were not immediately available to comment on Cell C’s opposition to their companies’ proposal.
A successful agreement between the two operators would help expand their existing deal to allow roaming on each other’s networks.
Telkom was battling to reduce its costs to offset a decline in landline use, increased operating expenses and a performance that had trailed its competitors, chief executive Sipho Maseko said in a presentation to investors last month.
The company is also trying to reduce expenditure at its Telkom Mobile business, which ranks by size behind MTN, Vodacom and Cell C.
The Competition Commission, which describes the talks on its website as a possible merger, was examining the proposals, spokesman Mava Scott said on Tuesday.
MTN South Africa’s general manager of regulatory affairs, Graham de Vries, and Telkom both said in separate statements that the Competition Commission’s actions were part of normal practice.
Telkom shares increased 2.28 percent to close at R61.57 in Johannesburg yesterday, valuing the company at R32 billion. The stock price has more than doubled this year, making it the best-performing stock on the all share index.
MTN’s shares retreated 0.56 percent to end at R257.55 on the JSE, off a high for the day of R259.10. – Bloomberg