S.Africa Telkom says in Africa partnership with AT&T

By Gugulakhe Lourie

JOHANNESBURG (Reuters) - South African fixed-line phone firm Telkom SA Ltd has agreed to work with AT&T to provide IT and telecom services in Africa in a bid to win business from foreign firms expanding on the continent.

Telkom's Chief Executive, Reuben September, told reporters the company had signed a memorandum of understanding with AT&T that would allow the U.S. firm's clients in Africa to use Telkom's Internet-based network on the continent.

Telkom's network -- built by acquiring companies such as Kenya's Africa Online and MWeb Africa -- would be linked to AT&T's global network, helping it win business from AT&T's customers.

Telkom shares traded 0.17 percent lower at 105.90 rand by 1304 GMT, outpacing the JSE Securities Exchange's blue-chip Top-40 index, which was 1.47 percent lower.

September said Telkom would also look at ways of collaborating with AT&T on mobile services in Nigeria and sub-Saharan African countries, where South Africa's MTN and Kuwait's Zain are strong.

Thami Msimango, head of Telkom's International business unit, said the deal would allow the company to get the most out of its African assets, after some investors questioned the logic of the purchases.

"Now we can serve more customers," he said. "We are sitting on a beast and we have to unleash it," he said, referring to the company's Africa network.

The agreement would also allow Telkom customers to access AT&T's global virtual private network. AT&T's only presence so far in Africa is in South Africa but it wants to invest further on the continent.