Telkom, a South African phone company seeking to cut costs on a struggling mobile service, is considering a sale of a network of telephone towers in the country, according to people with knowledge of the matter. The shares rose to the highest in more than seven years.
A potential sale may fetch $500 million to $1 billion, with bids due as early as next week, said one of the people, who asked not to be identified as the information is private. Telkom is working with consulting firm Accenture Plc on the sale, which may attract tower operators such as IHS Holding Ltd. of Nigeria and Helios Towers Africa, the people said. No final decision has been made and talks may still falter, they said.
Carriers in emerging markets including the Middle East and Africa are offloading towers. They cost more to run in such regions than in other parts of the world because of the need for backup generators and batteries to guard against power failures.
Kuwait’s largest wireless carrier, known as Zain, is working with Citigroup Inc. on the possible sale of towers in two Gulf countries, people familiar with the matter said last month.
Telkom, Africa’s largest fixed-line operator, started a mobile service in 2010 and remains the fourth-biggest wireless operator in South Africa. The Pretoria-based company is cutting jobs to reduce costs and revive sales growth as consumers switch to data-enabled smartphones and tablets from landlines.
The phone company’s shares rose as much as 5.7% to R77.95, the biggest intraday gain since November 18 and the highest price since November 2007. They traded 2.4% higher as of 3:37 p.m. in Johannesburg. Telkom was the second- best performer on South Africa’s bourse last year with a 150% gain.
Telkom is reviewing all its properties, assets and infrastructure and considering a wide range of options, the company said in an e-mailed statement. Representatives for Accenture and Helios
Source: Bloomberg News