S Korean mobile operator KT in talks to buy 20% of S Africa’s Telkom for $600 mn

South Korea's second-largest mobile operator KT Corp is in talks to buy a 20-per cent stake in South African group Telkom, for about $600 million.

Telkom today said that if the deal goes through, it would issue new shares at 36.06 rand a share, a premium of 12 per cent to the company's yesterday closing price on the Johannesburg's Stock Exchange.

"Shareholders are advised that while the discussions between Telkom and KT Corporation are progressing well, there is no certainty at this stage that these discussions will lead to a formal transaction being proposed or concluded," it said in a statement.

Telkom, 39-per cent owned by the South African government, is a wireline and wireless telecommunications provider operating in South Africa and more than 38 countries throughout the African continent.

Telkom has seen its revenues dwindling in recent years in fixed-line phones due to stiff competition from its rival Neotel, and costly blunders in Nigeria. Its newly launched mobile business is facing an uphill struggle against established carriers like Vodacom, Cell-C and MTN Group.

The company is currently the market leader in the broadband space, with more than 500,000 customers.

KT Corp is Korea's largest provider of fixed and mobile telephone services, and high-speed broadband fibre-to-the-home services. It also offers Internet Protocol television (IPTV) and satellite services.

Listed on the Korean, New York and London stock exchanges, KT Corp has 16 million mobile subscribers, 7.6 million broadband customers and 2.5 million IPTV subscribers.