091010 Telkom is before the Competiton Tribunal on Monday - fighting against the Internet Solutions charges that were referred by the competition commission last year .photo by Simphiwe Mbokazi 7

South Africa's ruling ANC is debating ways to nationalise struggling fixed-line operator Telkom, a delegate at the party's five-yearly policy conference said on Friday.

“There is support for the measure but it will not be included in the economic report because of the sensitivity,” the delegate told Reuters on the sidelines of the event.

“We discussed financing mechanisms to buy out the share not held by government and pension funds,” the delegate added.

South Africa's government and its employee pension fund together hold a 50.7 percent stake in Telkom, according to Thomson Reuters data.

This month, South Africa turned down a $385 million offer from South Korea's KT Corp for a stake in the company, saying it was strategic to its plan to roll out internet services to all South Africans by 2020.

Telkom shares have fallen more than 20 percent since the deal was scuppered at the end of May. They perked up briefly on June 19 amid reports the government might be getting ready to buy up the bits of the firm it does not already own.

Once a wholly owned state utility, Telkom has struggled in recent years, hit by declining fixed-line revenue as more customers move to mobile phones.

It belatedly launched its own mobile service but has so far failed to gain traction against Vodacom, which it used to own, and MTN Group. - Reuters