S. Africa backs out of S. Korea KT partnership
South Africa’s fixed line operator Telkom on Friday announced that plans for a partnership with South Korea’s telecom operator KT will not go ahead after Pretoria decided not to back it.
The two last year opened talks on a “strategic venture” that would have given KT Corporation a 20 percent stake in Telkom.
Telkom said in a statement it had been informed by the Communications Minister Dina Pule that cabinet had this week “taken the decision not to support the transaction as proposed.”
Telkom said it would discuss with the minister the cabinet’s decision and its implication.
“Cabinet didn’t support the transaction,” Minister in the Presidency Collins Chabane told reporters without giving reasons why the deal had been rejected.
The South African government is the largest shareholder in Telkom.
An agreement between the companies was announced earlier this month but for a lower price than punted last year.
Faced with stiff competition among mobile and Internet companies in South Africa, Telkom has suffered as it tries to broaden its products and expand into the rest of Africa.
But its venture in Nigeria turned disastrous, resulting in a loss of $1 billion.
South Korea’s KT, formerly a state-run fixed-line telephone company, has expanded into new technologies and non-communication businesses such as finance and media.