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Vodacom sounding out network sharing deal with Telkom

Vodacom sounding out network sharing deal with Telkom

South African operator Vodacom is reportedly discussing a network-sharing deal with fixed-line provider Telkom SA as a replacement for its previous agreement with Cell C.

Vodacom saw an annual revenue loss of ZAR1 billion (US$70.7 million) after Cell C pulled out of their network-sharing arrangement earlier this year in favour of a new agreement with Vodacom’s key rival, MTN Group. Cell C’s CEO Jose Dos Santos stated at the time that the deal was a better fit for the operator’s future.

Forging a new deal with Telkom SA would help Vodacom offset this loss somewhat. The operator is South Africa’s fourth largest phone company, and operates predominantly in the fixed-line space. The government holds a stake of almost 40% in the business. Bloomberg reported that the talks are not yet public, and accordingly neither Vodacom nor Telkom have made any comment.

According to Bloomberg, Vodacom leads the South African market with around 43 million subscribers, while MTN has around 30 million, taking second place. Their combined total base exceeds the country’s population, demonstrating the number of people with multiple wireless contracts. Cell C has around 16 million subscribers.

Both firms hold 4G spectrum, which is highly coveted by smaller operators, so network sharing deals represent an additional revenue stream for the larger players. Telkom has around 5.2 million subscribers and is looking to shore up its position against its larger rivals.

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