Telkom and MTN South Africa announce signing of heads of agreement
Telkom today announced that it has entered into a Heads of Agreement (HoA)
with MTN South Africa (MTN).
This HoA explains that the parties intend to conclude network management
services and reciprocal roaming agreements, whereby MTN will take over
financial and operational responsibility for the rollout and operation
of Telkom’s radio access network (RAN).
Each party will be able to roam on either party’s network.
Telkom CEO Sipho Maseko said, “In keeping with our plans to de-risk our
mobile business we have explored various options in recent months. I am
pleased that we are at this stage of engagement with MTN. The conclusion
of an agreement will allow us to expand our mobile coverage and to reduce
our operating costs and capital expenditure significantly.
“We will be able to provide our customers with effective access to the
latest state- of- the- art national voice, 2G, 3G and LTE networks without
having to incur the significant capital expenditure ordinarily required
to achieve such national coverage. Both Telkom and MTN will have access
to increased voice and data capacity, improved voice quality, and faster
data speed, at a lower cost than would have otherwise applied,” continued
The proposed transaction will allow Telkom to maintain a mobile offering
that supports a converged product set in the consumer and enterprise segments.
It is important to note that Telkom will continue to define and manage
its own mobile products and services and market itself under the Telkom
navbar-brand. The Company’s channels and distribution network, client service
infrastructure and billing channels will be unaffected by this agreement.
Telkom will continue to run these services as it currently does.
Telkom will maintain and evolve its mobile core network and systems and
continue providing differentiated products and services to the market.
“This is not a mobile virtual network operator (“MVNO”), Service Provider
or Reseller relationship; it is a ground-breaking means to outsource the
operation of our RAN for scale and efficiency, whilst retaining and enhancing
our competitive differentiation and flexibility,” said Maseko.
“This agreement will allow us to increase competitiveness and improve
our capabilities to compete at both wholesale and retail levels,” concluded
The proposed transaction is subject to the conclusion by the parties of
various binding commercial agreements to give effect to the proposed transaction