Telkom to join forces with South African gov’t following Sipho Maseko’s multimillion-dollar bid

Yusuf Abdulfatai -

Over a month after declining a bid led by South African businessman Sipho Maseko, Telkom, the country’s third-largest telecom services provider, is now engaged in advanced negotiations with the South African government to establish a partnership for the rollout of broadband products.

According to Communications and Digital Technologies Minister Mondli Gungubele, the proposed partnership would involve various Telkom businesses, including the Openserve fiber unit, the government’s Broadband Infraco SOC, and broadcast transmission services provider Sentech.

“We have almost agreed on how the partnership will work; we are at modalities now,” Gungubele said during an interview at Telkom’s office in Pretoria. He also clarified that the government has no intention of selling its 40-percent stake in Telkom.

This strategic collaboration aims to help the government achieve its goal of connecting 80 percent of South Africans over the next three years.

Openserve, which operates approximately 170,000 kilometers of fiber and legacy landline copper cables, and Broadband Infraco, with a fiber network spanning 14,862 kilometers, together represent a formidable force in the broadband sector.

The recent developments come after Maseko, through his firm Afrifund Investments and with support from Africa’s largest asset manager, the Public Investment Corporation (PIC), made a bold bid to acquire a 35-percent stake in Telkom.

The investors offered a substantial pooled fund of approximately R12 billion ($608 million), aimed at injecting much-needed capital into the company, which has been facing a decline in share price and a $660-million asset writedown.

Despite rejecting Maseko’s bid, Telkom has been actively pursuing alternative opportunities. On the other hand, Maseko himself has wasted no time and has recently been appointed to the board of Shoprite Holdings, Africa’s largest retailer.

This appointment further cements his position as one of South Africa’s prominent business leaders, boasting an extensive background in executive and board positions.