Well, the mobile operators are buying the incumbent in Joburg and the politicians are comfortable with the situation....really interesting times South Africa's Government Backs Telkom Asset Sale to MTN The communications department said it backed discussions between Telkom and MTN over plans by the fixed-line operator to sell some of its infrastructure to MTN. A brief statement by the department removes one of the main hurdles that any deal would face, since the government holds 38,9% of Telkom.. "As government, we are in principle supportive of the current discussions. We will await additional information in this regard prior to commenting further." The government is presumably now more au fait with both parts of Telkom's plan, since the department is working "in an interdepartmental task team to ensure that the interest of the country, all the workers and those of shareholders is protected". Analysts think MTN may combine its business in SA with Telkom's fixed- line unit and spin that off in a publicly traded company. The new company would be worth R55bn, and MTN might give its investors shares in the new company, said Scott Ryall, an analyst for Macquarie Bank. "Although we don't believe there would be significant synergy from combining the two South African businesses, this transaction could still be a positive for MTN," Ryall said. An outright purchase by MTN of Telkom's fixed-line business would be the "worst outcome for MTN and the best for Telkom" as it would dilute MTN's growth and its attraction as an emerging markets company and transfer the risk of owning a fixed-line network, Ryall said. However, Telkom investors would benefit from a share price upside of up to 15%, he estimated. A second option was for Telkom itself to buy MTN's local operations after Telkom sold its shares in Vodacom, Ryall said. MTN's growth in SA had slowed as the market became saturated. Selling its local arm to Telkom may make MTN's operations in 20 other countries look more "appealing to growth investors ," Ryall said. (Source: Business Day) Eric M.K Osiakwan Executive Secretary AfrISPA (www.afrispa.org) Tel: + 233.21.258800 ext 2031 Fax: + 233.21.258811 Cell: + 233.244.386792 Handle: eosiakwan Snail Mail: Pmb 208, Accra-North Office: BusyInternet - 42 Ring Road Central, Accra-North Blog: http://blogs.law.harvard.edu/eric/ Slang: "Tomorrow Now"