Takeover Rumours are Back in South Africa:

Rumours of consolidation in the South African mobile market refuse to go away, with talk of a deal between MTN and Telkom returning.

Telkom set up a mobile network subsidiary in 2010, initially branded as 8ta, but the loss making division has struggled to sign up customers, even after it signed a national roaming agreement with MTN.

Now MTN is reported to be in talks with Telkom that could see it buying the struggling mobile network, which has around 1.6 million customers.

The move has been prompted in part by consolidation elsewhere that saw rival Vodacom start exclusive talks to buy Telkom rival, Neotel.

An MTN spokesperson said that "accordance with good governance MTN does not comment on market rumour and speculation,"

Vodacom Purchase of Neotel Could Face Trade Body Obstruction:

South Africa's Wireless Access Providers' Association (WAPA) says that it would object to any attempt by Vodacom to buy the country's second largest landline operator, Neotel and said it was watching developments carefully before formulating a formal response.

WAPA believes that the acquisition would stifle competition, lead to job cuts, and do little to reduce the digital divide that it believes should be the country's top priority with regard to broadband.

WAPA says that it is seeing an increase in membership exceeding 25% per year, as smaller operators seize the gap created in the broadband market, particularly with respect to last-mile access.

"The growth in smaller operators is good for the customer and good for the country," says Christopher Geerdts, Chairperson of WAPA. "It increases competition, creates jobs and drives rural broadband penetration. Larger operators tend to cut jobs and cherry-pick customers in the most lucrative suburbs and business parks."

WAPA and many of its members have a commercial relationship with Neotel.

"WAPA's concern is that Vodacom's influence will dampen these gains achieved, severely limit open wholesale access and set back rather than increase competition and consumer choice," concludes Geerdts.

Vodacom Posts Rising Profits and Revenues:

South Africa based Vodacom has posted a rise in its first half revenues and profits that were at the upper end of its earlier guidance.

The company said that revenues rose by 6.6 percent to R36.7 billion. Trends in South African service revenue have improved, from declines in previous quarters, to flat growth in this half (2.6% excluding MTR impact). Growth in data revenue of 20.6% and positive growth in prepaid segment revenue was offset by a 23.6% decline in interconnect revenue coupled with poor performance by the independent service providers.

Strong growth in customers and benefits from accelerated investment programme in Mozambique supported service revenue growth of 8.7% in the international operations. International operations now contribute 21.6% of service revenue up from 20.2% a year ago.

Net profit rose by 8.4 percent to R6.63 billion. Debt ended the period at R11.96 billion, a rise of 3.4 percent over the year. During the period the Group obtained two additional loans with a combined value of R4.5 billion from Vodafone, which owns 65% of the company to finance capital expenditure and working capital requirements and to repay maturing long term debt.

The group's active customers increased 9.7% to 53.8 million; with net connections of 949, 000 for South Africa and 2.3 million in the international operations for the six months period.

Vodacom Denies Botswana Investment Rumours:

South Africa based Vodacom has refuted reports that it is in talks to take a stake in Botswana based BeMobile.

There had been media reports late last week that the South African firm was either in a technology sharing agreement with BeMobile or had agreed to buy a stake in the firm.

It was claimed that the two companies would announce a deal by the end of this year, but Vodacom has now denied that any such talks are taking place.

The denial leaves BeMobile though in a difficult situation as the state-owned company is said to be struggling to compete with its more nimble private competitors and is said to be looking for a technology partner to assist it.

BeMobile's parent company, Botswana Telecommunications Corporation (BTC) is currently working on plans for a privatisation that would see a minority of its shares sold to the public.

Vodacom Purchase of Neotel Could Face Trade Body Obstruction:

South Africa's Wireless Access Providers' Association (WAPA) says that it would object to any attempt by Vodacom to buy the country's second largest landline operator, Neotel and said it was watching developments carefully before formulating a formal response.

WAPA believes that the acquisition would stifle competition, lead to job cuts, and do little to reduce the digital divide that it believes should be the country's top priority with regard to broadband.

WAPA says that it is seeing an increase in membership exceeding 25% per year, as smaller operators seize the gap created in the broadband market, particularly with respect to last-mile access.

"The growth in smaller operators is good for the customer and good for the country," says Christopher Geerdts, Chairperson of WAPA. "It increases competition, creates jobs and drives rural broadband penetration. Larger operators tend to cut jobs and cherry-pick customers in the most lucrative suburbs and business parks."

WAPA and many of its members have a commercial relationship with Neotel.

Vodacom in Exclusive Talks to Buy South African Landline Network:

South Africa's Vodacom is reported to have entered into exclusive talks to buy the country's second landline network operator, Neotel from its Indian owners.

Vodacom had previous been said to be the last company running its eye over Neotel's accounts after rival MTN dropped out of bidding.

The advantage for Vodacom apart from Neotel's own newish LTE network and radio spectrum would be access to a much larger landline network for backhaul and to cross sell to corporate users.

A deal to buy Neotel is expected to be worth around US$500 million, according to Bloomberg News, who cited an unnamed person familiar with the talks.

Neotel is majority owned by India based Tata Communications, who bought their initial stake in 2008 and have slowly built it up to 67.3% as of this March.

Vodacom is 65% owned by the UK based Vodafone, with the rest of its shares listed locally.