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JSE-listed cellular operator, MTN, says Turkish operator Turkcell has told it that it believes it may have a claim against the operator and will be filing a case in a US court.MTN says in a statement that Turkcell has told it that it has a claim against it and one of its subsidiaries over a GSM licence in Iran. However, the company has not filed a claim and no papers have been served, the operator says.The JSE-listed operator has a 49 percent stake in Irancell through one of its subsidiariesThe sharp decline in Tekom's share price in recent months could pose a challenge for it in its talks with KT Corp to sell 20 percent of its equity to the Korean telecommunications firm. Telkom's share price has fallen significantly in recent months because of disappointing financial results and, more recently, because of investor concerns that it could be forced by the Competition Tribunal to cough up a large fine for alleged anticompetitive behaviour dating back to the early part of the last decade. The fall in Telkom's share price is sparking debate about whether KT Corp will revise its mooted R36/share offer to buy a minority stake in the company. There are concerns KT will want to renegotiate any offer price because of the slump in Telkom's share price since the talks were first announced. Telkom closed at R27,05/share on Thursday after touching a new multi-year low in intraday trade. In the past year, the share has declined by almost 22 percent. Irnest Kaplan, MD of Kaplan Equity Analysts, says he isn't sure what KT Corp's rationale is in pursuing the deal in the first place. "One of the questions is why it's taking only 20 percent," he says. With that sort of investment, it will exercise little control over Telkom. Kaplan says he thinks the Korean company wants to get its "feet wet" in the African market but doesn't yet want a "full swim". He suggests the move is perhaps part of a longer-term plan, with Telkom as an entry point into the continent. "If there is a long-term strategy, then a share price of R36/share doesn't make that much of a difference." Nevertheless, Kaplan says it's hard to predict how KT Corp will react to Telkom's falling share price and the potential fine it faces from the Competition Tribunal. Whether the deal goes ahead, or whether its terms are altered dramatically, Kaplan says an announcement from both parties is probably imminent. "Without something like a management contract [for KT Corp], it's a small stake," says Kaplan. "It's probably just a mutually beneficial move. KT can see if it wants to take this further and Telkom gets some insight and expertise into what KT has done [in Korea], even though the Korean market is very different to SA's." Kaplan says the recent decline in Telkom's share price positions KT Corp more strongly and will help it negotiate good terms if it wants to. Another analyst, who declined to be named because he has to work closely with Telkom, says it's important to remember that the mooted R36/share offer for the stake in the company is not binding, but rather a preliminary figure that was "thrown around". In additional, some sort of management contract for KT Corp, where it extracts fees, seems "very likely". The analyst adds that KT Corp may subsequently get involved elsewhere in Africa "in other disorganised fixed-line operators", and may understand clearly the importance of fixed-line networks for mobile operators requiring backhaul from their base stations - a big opportunity. KT Corp will probably offer closer to R32/share, the analyst says, adding that this might incur resistance from shareholders, some of whom may argue that Telkom's recent share price decline is insufficient grounds for that sort of valuation. |
Earlier local news articles: |
Seacom plans to upgrade its subsea telecommunications network to newer fibre-optic switching technology later this year that will more than double the capacity on the system.
CEO Mark Simpson says the company will begin tests in the next couple of months with a view to upgrading the US$600m system from 10Gbit/s to 40Gbit/s optical-fibre technology.
The move comes as the third anniversary of the launch of the system, which brought down bandwidth prices for SA Internet users, nears.
The Seacom system... |
Last Friday, the Independent Communications Authority of SAs (IcasaҒs) complaints and compliance committee brought Neotel a step closer to gaining access to rival Telkoms network into homes and businesses. But with the unbundling process underway, albeit belatedly, is it worth continuing the fight?
Neotel CEO Sunil Joshi says local-loop unbundling (LLU) җ the process where operators gain access to Telkoms ғlast-mile infrastructure ԗ is important to the company for two reasons. We ... |
While a silent price war is brewing in the South African mobile industry, mobile operator Vodacom is prepared for the next amount of salvos from the competition which sees four mobile operators taking on each other in a highly-competitive industry.
֓Strong competition and falling prices arent new Җ over the past year our average effective price per minute has fallen 14% and the price per MB on the same basis is down 18%, said Vodacom CEO Pieter Uys.
Uys explained that the operator has a n... |
Vodacom is expanding its reach into under-serviced areas and has reworked its distribution models in a bid to grow its subscriber base, which could place pressure on average revenue per user.
The company yesterday released its results for the year to March. It said South African customers grew about 26.5 percent, to 28.9 million, a gain that was partially driven by the company pushing ultra-low-cost handsets, promotions and a focus on under-serviced areas.
However, Vodacom's average revenue per user (... |
Vodacom, SA's largest network operator, has paid back about 95% of its free cash flow in dividends to shareholders this year.
The company this morning released its results for the year to March and said service revenue gained 7.8%, to R58.2 billion.
Vodacom made R10.97 billion in free cash flow, a 24.3% gain on the year. It paid out a total of R10.6 billion in dividends during the year after declaring a 260c payout at half year and a 450c dividend at full year.
The final dividend was a 60.7% increa... |
In what could be a landmark decision for SAs telecommunications sector, and for consumers, the Independent Communications Authority of SAҒs (Icasas) complaints and compliance committee on Friday appeared to open the door for Neotel to gain access to TelkomҒs last-mileӔ copper network.
A written decision is expected to follow in the next few weeks. The decision could have profound implications for the industry as it could mean that Neotel and possibly other operators ח are given e... |
Vodacom is in breach of Independent Communications Authority of SA (Icasa) regulations for not filing its new 99c/minute prepaid tariff plan with the regulator before announcing the new rates on Wednesday.
Thats the view of Icasa, whose spokesman, Paseka Maleka, tells TechCentral that Vodacom ғdid not follow the process of applying to the authority as required by regulations when it introduced its tariff changesŔ.
But Vodacom spokesman Richard Boorman denies that the operator is in breach ... |
Its no secret that despite having the longest-standing mobile networks on the continent, SA still has some of the highest mobile call rates in Africa. This week, Cell C went some way to correcting that when it announced it was cutting prepaid rates, and hinted that new post-paid pricing will follow soon, but thereҒs arguably still a long way to go.
On Wednesday, Cell C announced it was dropping prepaid call rates to 99c/minute regardless of the time of day or destination network. Within minutes, Vo... |
Second cellphone operator MTN has turned its nose up at the significant prepaid pricing cuts announced yesterday by Vodacom and Cell C, saying it still offers the most affordable prepaid experienceӔ in the market.
Vodacom and Cell C have slashed their prepaid rates, each coming out with 99c per minute deals that will be available to their respective prepaid markets as of Sunday. Vodacom's new prepaid product, Freedom 99Ӕ, allows customers to make off-net, anytime calls for 99c per minute. Cel... |
ALAN Knott-Craig promised to shake up the cellphone industry when he joined Cell C last month and he has not disappointed he cut prepaid call tariffs by more than 34% yesterday, bringing them lower than contract call rates for the first time in 18 years.
Cell C introduced a new prepaid package with prices reduced by 34% to an all-day rate of 99c a minute, with per-second billing from the first second. This applies to voice calls from Cell C to any network. Existing customers can migrate to the new packa... |