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28 June 2011

Telkom signs heads of agreement on Multi-Links with an affiliate of Helios Towers Nigeria

Telkom shareholders are referred to the announcement on 13 June 2011 regarding the failure to sell the CDMA business of Multi-Links Telecommunications Limited ("Multi-Links") to Visafone Communications (because certain conditions precedent had not been met) and the Telkom Board's decision to stop funding Multi-Links.

Telkom has now reached an agreement with an affiliate of Helios Towers Nigeria, Limited ("HTN") on the future of Multi-Links. Under the terms of the heads of agreement, which are subject to the relevant approvals, the affiliate of HTN will acquire full ownership and control of Multi-Links.

The entire issued share capital of Multi-Links will be sold for a consideration of USD10 000 300,00 which may increase depending on the achievement of certain conditions. Telkom will continue operational funding to Multi-Links to enable completion of the transaction.

Telkom will participate in a portion of any upside above a certain threshold in the case of a disposal of Multi-Links by an affiliate of HTN on or before three years of deal completion. The participation portion is dependent on the lapse of certain time periods.

In Boston, Nombulelo Moholi, Group Chief Executive Officer of Telkom, stated: "We are glad that we have been able to negotiate an agreement which will enhance the strategic focus for Telkom."

Lazarus Zim, Chairman of Telkom, stated: "We believe that this is a win-win transaction that will yield benefits to both sets of shareholders. In addition, we believe that embarking on this path will be beneficial to all of Multi-Links's stakeholders particularly, employees and customers in Nigeria."

Inder Bajaj, Chief Executive Officer of HTN, expressed similarly: "We are very pleased to reach an agreement with Telkom. Upon acquisition Helios Investment Partners will take forward the future course of Multi-Links to ensure the smooth and orderly transition, re-introduce operational stability and maximize value for all stakeholders including Telkom."

Finally, Telkom and HTN wish to acknowledge the visionary leadership and diplomacy role of Dr Charles Okeahalam, Chief Executive Officer of AGH Capital who brought both parties together to enable them to reach this agreement

For further enquiries, please contact:

Pynee Chetty

Senior Specialist: Media Relations

Group Communication

Tel:+27 12 642 1716

Mobile: +27 81 389 7874

Email: chettpr2@telkom.co.za

 OR

Leigh-Ann Francis

Specialist: Media Relations

Group Communication

Tel: +27 12 642 1728

Mobile: +27 81 391 4780

Email: francilm@telkom.co.za

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ABOUT TELKOM:

Telkom is a leading communications services provider in South Africa. We had consolidated operating revenue of R16.8 billion and normalised profit after tax of R1, 683 million for the period ended 30 September 2015. Total assets amounted to R41.9 billion and equity attributable to the owners of Telkom to R23.5 billion as of 30 September 2015. The group generated normalised free cash flow of R1.4 billion for the period ended 30 September 2015.

As of 30 September 2015, we had approximately 3.3 million telephone access lines in service and 1,030,441 ports connected via MSAN access. We offer business, residential and payphone customers a wide range of services and products, including:

  • fixed-line retail voice services using PSTN (Public Switched Telephone Network) lines, including ISDN (Integrated Services Digital Network) lines, and the sale of subscription based value-added voice services and calling plans;
  • fixed-line customer premises equipment rental and sales services both voice and data needs and these include PABX, Computers, Routers, Modems, Telephone handsets and other ancillary equipment;
  • interconnection services, including terminating and transiting traffic from South African mobile operators, as well as from international operators and transiting traffic from mobile to international destinations;
  • fixed-line data services, including domestic and international data transmission services, such as point-to-point leased lines, ADSL (Asymmetrical Digital Subscriber Line) services, packet-based services, managed data networking services and internet access and related information technology services;
  • Data Centre Operations includes e-commerce, application service provider, hosting, data storage, e-mail and security services;
  • W-CDMA (Wideband Code Division Multiple Access), a 3G next generation network, including fixed voice services, data services and nomadic voice services;
  • mobile communication services, including voice services, data services and handset sales through our mobile navbar-brand called Telkom Mobile;
  •  information and communication services including cloud services, infrastructure services, workspace services, global service integration management and hardware and network equipment sales locally, in seven African countries, the UK and Dubai through Business Connexion Group; and
  • other services including directory services, through Trudon (Pty) Ltd, wireless data services, through Swiftnet (Pty) Ltd.

Convergence is one of our key strategic initiatives in building a sustainable future for Telkom.  We will lead the provision of converged services in South Africa in support of our mission statement: Seamlessly connecting people to a better life.