China Mobile reportedly entered into talks to acquire struggling South African operator Cell C, but could face competition from local rival Telkom, which was also rumoured to be interested in a possible deal.

ITWeb reported a deal between China Mobile and Cell C is “imminent”, in a move which could prove significant for the South African mobile market given the Chinese operator’s scale and financial means.

State-owned China Mobile is the world’s largest operator, but currently has limited presence internationally.

A separate report from TechCentral, however, indicated Telkom had again shown signs it could also be interested in Cell C, despite a mooted deal between the two breaking down earlier in the year.

Cell C’s struggles were highlighted two weeks ago, when it reported a loss of ZAR8 billion ($527 million) for the 12 month period ending 31 May.

Aside from a possible merger, the company is also reportedly in talks with potential investors, as it looks to recapitalise the business and repair its financial situation.

Responding to the China Mobile speculation, Cell C told ITWeb: “We cannot comment on behalf of China Mobile who may be in negotiations with various mobile operators around the world. Cell C will keep the door open to any conversations that will assist the company’s future viability.”