South Africa’s Telkom sells loss-making Mauritius IT unit
Telkom said the companies were “an immaterial part of the Group” and the deal was part of a turnaround plan to restore the company’s financial health. (Image: The Zambezian)
South African fixed-line telecoms operator Telkom has sold loss-making Mauritius unit iWayAfrica, it announced in a press statement on Saturday.
The sale of its Pan African IT business is part of a turnaround plan to restore the company’s financial health, the statement noted.
The deal was concluded late-afternoon on Friday, Telkom said, adding that the companies were “an immaterial part of the Group”.
Mauritius-based internet firm iWayAfrica operates in eight African countries and offers terrestrial wireless and VSAT services to business and residential markets.
However, several years of poor performance of the iWay Group had resulted in continued negative EBITDA contribution to the group, Telkom’s Chief Executive Officer Sipho Maseko noted.
Accordingly, the ailing unit has been spun off and sold to South African technology major, Gondwana International Networks.
Maseko added that Gondwana has the tangible experience of managing and owning ISPs on the African continent, which he believed would be beneficial in taking the business forward.
Also, Maseko was quoted as saying that this transaction was one of many initiatives that would contribute to Telkom’s own turnaround and allow them to focus on their core South African fixed-line and mobile operations.
Maseko added that Telkom was also pursuing several other initiatives in a coordinated manner to restore the company’s financial health.
In the statement, Telkom explained that iWayAfrica was formed by the amalgamation of Mweb Africa and Africa Online in 2007.
Maseko said that Telkom has struggled to drive growth and profitability in the iWayAfrica business since it was acquired. However, the struggling business unit has pulled down the performance of the group as a whole.
Moreover, with Telkom’s investment in iWayAfrica having been fully impaired during the 2012 financial year it presented a timely opportunity for a sale, Maseko said.
He concluded that the year has been spent in concerted efforts for stabilising Telkom’s South African business, and their focus was now on reviving Telkom SA’s full performance potential.