Nigeria Content Online

South Africa’s
Telkom aims to sell its money-losing Nigerian mobile business within
the next six months, as it looks to slim down and focus on its new
mobile operation at home.

Africa’s largest
fixed-line operator, which posted a 5 percent drop in first-half profit
on Monday, has been looking to exit its Multi-Links mobile business,
one of four mobile operators using the CDMA technology platform in a
market overwhelmingly dominated by the rival GSM standard.

Telkom recently
launched a mobile business in the crowded South African market, where
it faces stiff competition from MTN Group and its former unit Vodacom.

Jeffrey Hedberg, Telkom’s acting chief executive, said selling the mobile unit in Nigeria was a top priority.

“There is a clear
need to stop the bleeding in the CDMA business, and on the fixed side
we are in discussions with other partners; again, about increasing
country scale and minimising our exposure,” he said.

Telkom said it had
received a number of expressions of interest for the Nigerian business,
which was bought for $330 million three years ago and incurred a 262
million rand ($37.42 million) operating loss in the six months to
end-September.

Shares of the company jumped 3 percent, although analysts cautioned that a sale of the unit was not yet a done deal.

“At this point in
time, they are talking about it; we need to actually see the cash flow
arrive before we become too excited,” said David Lerche, a telecoms
analyst at Avior Research.

Tough sale

One analyst, who declined to be identified, said the Nigerian mobile unit would be tough to sell.

“If you look at
performance metrics, it’s not a compelling story in a sense that Telkom
will get the price it wants,” said the analyst.

Telkom said
normalised headline earnings per share, which strip out one-time
charges, fell to 265.7 cents in the six months to end-September from
280.6 cents a year earlier, at the low end of its own forecast for a
drop of up to 20 percent.

At home, Telkom is attempting to offset a decline in revenue from traditional telephony by focusing on its new mobile business.

8.TA, Telkom’s mobile phone business, has signed up about 186,033 customers since it was launched on October 15.

At 1015 GMT, Telkom
shares were up 3 percent to 37.0 rand, outperforming Johannesburg’s
All-Share index, JALSH, which was up 0.7 percent.