The two companies have emphasised that the merger discussions are still at an early stage and there is no guarantee that the transaction will take place or what the details would entail, as reported by“If concluded, the transaction may have a material effect on the price of the company’s securities. Accordingly, shareholders are advised to exercise caution when dealing in the company’s securities until a further announcement is made.
Dominic Cull, a telecom lawyer and owner of Ellipsis Regulatory Solutions, suggests that the current discussions between MTN and Telkom are in response to a merger between competitors Vodacom and Community Investment Ventures Holdings ., “a deal mooted in November 2021 by rivals Vodacom and the Remgro-controlled CIVH, merging their fibre network operations, had the potential to reshape the market, leaving MTN and Telkom facing a rival that now had considerable fibre assets”.
For MTN, the merger with Telkom would also see its transition into a powerful fibre operator that would enable it to successfully compete with Vodacom. But first they will need to get past the Competition Commission, who previously accused both MTN and Vodacom of having significant market power and using it to drive up data costs.