South African fixed-line operator Telkom has confirmed that talks are “ongoing” regarding its takeover by a consortium led by the Mvelaphanda Group, and the divesture of its 50 percent stake in mobile operator Vodacom to co-owner Vodafone. The two deals are linked: the Mvelaphanda bid for Telkom’s entire share capital is dependent on Telkom offloading its stake in Vodacom. Vodafone is already in talks with Telkom to buy an extra 12.5 percent of Vodacom, which would lift the UK-based company’s shareholding to 62.5 percent, though the deal is reportedly conditional on Telkom unbundling or spinning-off its remaining 37.5 percent stake to its existing shareholders. “Shareholders are … advised to continue to exercise caution when dealing in Telkom securities until a further announcement is made,” the firm said in a statement to the Johannesburg Stock Exchange. 

Telkom CEO Reuben September hinted last month that the disposal of the Vodacom stake would enable Telkom to re-enter the country’s mobile market; its alliance with Vodafone had barred it from doing so previously. The company has reportedly invested ZAR1.7 billion (US$223 million) in W-CDMA technology, allowing it to offer mobile data alongside fixed and ‘fixed-wireless’ voice services. It was also announced last month that Telkom had chosen Chinese vendor Huawei as supplier for its emerging mobile aspirations.