Telkom in Talks to Buy Uganda Telecom Stake

Posted 08 January 2007 @ 10:46 am EET     Print     Reprint     E-Mail     Comments

JOHANNESBURG (Reuters) - South Africa's fixed-line phone company Telkom is in talks to buy a stake in Uganda Telecom a deal that would give it a long-coveted presence outside its lacklustre home market.

Telkom said on Monday it was in discussions with Ucom, which owns 51 percent of Uganda's fixed-line operator, as part of the South African firm's drive to expand in the rest of the continent. It gave no further details.

"Telkom can confirm that we are currently in discussions with Ucom, a telecommunications operator based in Uganda," the company said in a statement emailed to Reuters.

According to media reports in Uganda, Telkom is in the final stages of agreeing a deal to buy Ucom's 51 percent stake in Uganda Telecom, which is 49 percent owned by the East African country's government.

Ucom is 60 percent owned by Telecel while Germany's Detecom and Egypt's Orascom hold 20 percent each, according to Ugandan media reports.
No one at Ucom or Uganda Telecom could immediately be reached for comment.

Telkom is keen to beef up its data business and expand into high-growth markets across Africa to help offset waning revenues at home, as it faces competition from mobile phone companies and a new fixed-line operator. It has repeatedly said it is looking at opportunities to expand in Nigeria, Kenya, Botswana, Angola and the Democratic Republic of Congo, but has yet to secure a deal.

Telkom and Britain's Vodafone jointly own mobile phone operator Vodacom, which is also keen to expand elsewhere in Africa, where demand for cell phones is booming due to patchy land-line infrastructure. Uganda Telecom also runs a mobile phone business, which competes with South Africa's MTN.