State-owned fixed-line operator Telkom is taking major steps to defend its declining revenues.
After announcing that it had rejected an offer that was made by Dubai-based Oger Telecoms in January, Telkom yesterday said that it would be pursuing alternative markets.
It also said it would "substantially reduce its investment" in Telkom Media, but that it would do so in a way that was in the best interests of shareholders.
The company would not reveal how much Oger had offered, nor would it say what assets were under consideration.
Piney Chetty, Telkom's spokesman, said: "We are not prepared to reveal anything further than we already have in our statements."
The company said in its statement: "The previously announ-ced expression of interest by Oger Telecoms was evaluated by the board and has been declined [because] it is not in the interests of Telkom shareholders."
Shares in Telkom were the heaviest losers on the JSE's Top 40 index, plunging as much as 9,25percent to R132,49 in morning trade.
Analysts attributed the fall of the share price to Telkom's rejection of Oger's offer.
Oger, which is controlled by the family of late Lebanese prime minister Rafik al-Hariri, operates in Saudi Arabia, Lebanon and Jordan, providing fixed-line, mobile and Internet services.
Rudolph Muller, MyADSL director, said: "The main reason that the Oger deal might have fallen through was that there wasn't enough value for Telkom.
"The government might also have indicated that it still prefers to deal with MTN."
Telkom also said yesterday it was considering Nigeria as a key part of its growth strategy.
Last year, Telkom acquired a 75percent stake in Multi-links, a Nigerian-based telecoms operator, for $280million (R2,27billion).
Telkom aims to capture 4,2million subscribers by 2009 in Nigeria's voice and data market.
Telkom's chief executive Reuben September said: "As part of our growth strategy, it is an imperative to replace declining revenue due to market share losses to competitors, fixed-to-mobile substitution, pricing pressures and economic pressures."