South African fixed-line phone operator Telkom will not be making any new investments in telecommunications in Africa in the near future. Furthermore, the group’s Nigerian arm, Multi-Links, will be sold off to reduce losses, Telkom’s chairman said on Thursday.
“We are in a very advanced stage at the moment,” Lazarus Zim said when asked about plans to sell Multi-Links. He declined to give a timeframe or potential price for the sale.
Telkom announced in November that its board had mandated management to review options for the exit of the code division multiple access (CDMA) business in Nigeria. Multi-Links’ operating revenue for the six months ended September 2010 decreased 9% to R744-million and operating expenses declined 15.4% to R1.008-billion. The loss from operating activities narrowed by 29.4% to R262-million, Telkom said.
“We need to take decisive action in Nigeria and we have already communicated that we are exiting the CDMA business. Multi-Links is less of a headache for us because decisive action is near,” said Telkom’s newly appointed CEO, Pinky Moholi, when asked about the impending sale.
Telkom reported that normalised headline earnings per share from continuing operations decreased by 5.3% to 265.7c for the six months ended September 2010.
Group revenue declined 5.4% to R17.604-billion, with profit from continuing operations down 9.3% to R1.4-billion.
“At some point we had ambitions in Africa, but that was before the economic meltdown, and of course Telkom was affected, putting the brakes on the expansion side. That is not to say that Africa is not the frontier of our ambitions in the future. But it is important that we fix what is broken before we venture further into Africa going forward,” Moholi said, alluding to .
By Angela Meadon