South Korean telco set to announce purchase of African ISP as part of international expansion plan.
South Korea’s largest fixed-line operator, KT Corp., is close to signing a deal to buy an African Internet service provider from Telkom S.A., a person familiar with the transaction said Monday.
The person didn’t disclose how much it would pay for iWayAfrica, but the acquisition is part of the firm’s moves to expand its presence overseas, particularly the Middle East and Africa. It also marks the latest in a string of outbound acquisition attempts by the company, which is seeking to move out of a domestic market where margins are falling.
“The iWayAfrica deal is almost done and is likely to be made public soon,” the person told The Wall Street Journal.
A KT Corp. spokesman said that iWayAfrica “is one of our considerations, but nothing has been decided.”
KT Corp. said last year that it is aiming for $3.5 billion in overseas revenue by 2015, but it has had little luck in striking an overseas deal so far.
Just earlier this month, it dropped its initial bid to buy a controlling stake in Maroc Telecom from Vivendi SA’s, citing price concerns. In June last year, it had to suspend its plan to acquire a 20% stake in Telkom S.A. amid opposition from the African country’s government–Telkom’s major shareholder with a 39.8% stake.
While a spokesman denied its talks with KT Corp. when last contacted on Apr. 19., Telkom says on its website that iWayAfrica has been facing serious competition from cheaper offerings in the fixed and mobile broadband markets and it will “rationalize the operations…over the next year,” without elaborating.
Telkom owns all of iWayAfrica, which provides Internet service through satellites, and has outlets in eight countries across the African continent.