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The MTN deal is with Cell C’s right to shares in South Africa’s Telkom

FILE IMAGE: A shopper walks past a MTN shop at a shopping centre in Johannesburg, south africa, south africa, South Africa, March 2, 2017. REUTERS/Siphiwe Sibeko

JOHANNESBURG (Reuters) – South africa’s MTN Group (MTNJ.(J) has signed a comprehensive roaming services and an agreement with the nation’s third-largest carrier of Cell C, and MTN said on Monday, pushing shares in rival Telkom (TKGJ.(J) by more than 5%.

The deal also puts a dampener on Telkom’s proposed takeover of Cell C, which is the sole property of Blue Label Telecoms (BLUJ.(J), and is struggling under the weight of its large debt, which it announced on Friday.

The sight of a pre-existing contract between MTN and Cell C), thus allowing the struggling carrier to have access to MTN’s network in some parts of the country, it expanded nationally.

“This is in line with MTN’s strategy for the continued development of the group’s wholesale business, and both MTN and Cell C to take advantage of, the efficiency. and the support of a more sustainable and competitive industry,” MTN said.

The deal will save the Cell C to pay substantial amounts that would otherwise allow for a country-wide coverage.

Telkom shares were down 4.29%, by 0758 GMT, while the Blue Label shares are up 4.71% to the MTN shares were flat. Telkom does not immediately respond to a request for comment.

Blue Label said that the agreement with MTN that would lead to a significant reduction in costs for the carrier, which will also be the opportunity to discuss an increase in Cell C.

For MTN users, in the meantime, the deal means that the chances of earning more revenue from Cell C, which has helped its business and wholesale revenue of 8.4% to 13.4 billion rand in 2018, the year.

In the six months to 30 June, MTN has chosen not to recognize revenue in the amount of 393 million rand Cell C deal in the company’s financial problems.

Report by Emma Rumney; editing by Uttaresh.Q and a with Jason Neely

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