A potential breakup of Telkom, South Africa's former fixed line telephone monopoly, would create a big bang in the world of African telecoms, which could position Vodafone and MTN as the continent's dominant players.

Johannesburg-listed MTN, which has close links to South Africa's ruling ANC government, is the continent's largest and fastest growing mobile phone operator.
Vodafone, the world's largest mobile group by revenue, is looking to expand in Africa through Vodacom, its 50-50 joint venture with Telkom.
While Telkom confirmed last month that it is in talks with MTN and Vodafone, industry analysts say it is still too early to predict the outcome of such complex negotiations.
Telkom reported pre-tax profit of 2.02 billion dollars in 2006-07, down 2 percent. The reason it is prepared to consider a breakup is rooted in political as well as commercial factors.
One of Telkom's grievances centers on a clause in Vodacom's original shareholder agreement from 1993 that stipulates it cannot enter markets north of the equator.
Whether or not the clause prevented it from doing so, Vodacom has lost market share across Africa by not expanding as aggressively as its rivals expand. Although Vodacom has investments in Democratic Republic of Congo, Lesotho, Mozambique, and Tanzania, MTN has mobile businesses in 15 African countries.
Vodafone, meanwhile, is looking to expand in North Africa and the Middle East through an alliance with Telecom Egypt, the country's leading fixed line telecoms company.
Vodafone established an Egyptian mobile business in 1998, which recorded revenue growth of 40 percent in 2006-07. It also bought a 35 percent stake in Safaricom, Kenya's largest mobile operator, in 2000.
In 2005, Vodafone increased its stake in Vodacom from 35 to 50 percent, which underlined that Telkom had no path to control of the South African mobile operator.
A Telkom-MTN combination would allow Telkom to gain from MTN's superior African mobile network.
(Source: Financial Times)