Telkom and AT&T Announce Strategic Agreement

Companies Aim to Extend AT&T's Global Networking Reach to Sub-Saharan Africa and Boost Telkom's Strategy to Grow a Strong ICT Footprint on the Continent

Johannesburg, South Africa, April 16, 2009

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Telkom, one of the largest communications services providers on the African continent, and global communications leader AT&T*, have entered into an agreement that will allow both companies to explore ways to provide global seamless communication and technology solutions and services to multinational customers (MNCs), either based in or seeking to extend their operations in Sub-Saharan Africa.

Telkom CEO, Reuben September, and Ronald E. Spears, president and CEO of AT&T Business Solutions, today participated in a ceremony in Johannesburg to sign a Memorandum of Understanding (MOU). The agreement calls for both companies to establish seamless connectivity between the Telkom and AT&T networks, so that companies in Sub-Saharan Africa can connect more effectively to other global markets.

It would also allow multinational companies seeking to establish or expand their operations in these African countries to obtain Internet Protocol (IP) based and mobility services and applications more easily within the continent and around the world.

Under the terms of the MOU, the two companies will begin work towards definitive agreements that would:

  • Directly connect the Telkom regional network and the AT&T global network.
  • Deliver a wider geographic footprint of telecommunications services, both in Sub-Saharan Africa and other global points.
  • Enhance mobile service capabilities for corporate customers in Sub-Saharan Africa.
  • Extend global VPN (Virtual Private Network) services to support the state-of-the-art network requirements of customers either headquartered in or seeking to expand sites in Sub-Saharan Africa.
  • Explore other potential opportunities in areas such as Telepresence, hosting and professional services.
  • Expand the existing global wholesale voice services relationship between Telkom Group and AT&T.

September welcomed the agreement, saying that it “further entrenches the solid progress we have made in executing our strategic imperatives”.

“This agreement will definitely contribute to our objective of expanding our leadership position beyond the borders of our country. The fact that AT&T has chosen to conclude this MOU with Telkom is further testimony of the Group’s network reach and capability. At the same time, the agreement will give impetus to Telkom’s determination to expand geographically and become a fully fledged Pan-African operator,” added September.

The agreement concluded with AT&T further reinforces other major deals which Telkom has secured on the strength of its network reach, resilience, management, capabilities and expertise. These include a multi-million rand networking solution for Caltex, the South African subsidiary of Chevron, the contract signed with Absa in August 2008 (which is one of the largest ever concluded with a corporate customer) and the partnership with FIFA for the provisioning of the backbone ICT infrastructure for the Confederations Cup and 2010 Soccer World Cup.

“This opportunity is a milestone for AT&T,” said Spears. “By working with Telkom we will be able to extend AT&T’s world-class IP based services to Sub-Saharan Africa as well as strengthen our ability to serve the needs of customers in the key South African market. Advanced telecommunications networking is a powerful driver of economic growth, prosperity and stability, and an agreement will help progress the availability of and investment in telecommunications services in these countries. This deal provides AT&T with a significant opportunity to drive IP networking for MNCs to some of the most exciting, dynamic, but so far, under-served markets in the world.”

This agreement reflects AT&T’s continuing commitment to serve the needs of multinational customers everywhere they operate. An increasing percentage of AT&T’s global customers have significant communications requirements in Africa, and this will further facilitate the demand for state-of-the-art IP services in Africa.

This deal is part of AT&T’s commitment to invest today for the needs of tomorrow. AT&T recently announced plans to invest approximately $1 billion in 2009 to continue building out its global network, while driving new services and network-based applications to businesses. Spurred by continued demand for business applications made possible by the proliferation of high speed communication networks and mobile devices worldwide, the investment will focus on both network infrastructure and services and support.

Telkom’s expansion into Sub-Saharan Africa was, until recently, restricted by the Vodacom shareholders’ agreement which has now been lifted by the sale of 15% of Telkom’s stake in Vodacom to the UK’s Vodafone Group and the unbundling of the remaining 35% to Telkom shareholders.

September added that Telkom is now free to compete and that the Group will, in co-operation with AT&T, also explore opportunities for collaboration in the area of mobile services in Nigeria and other Sub-Saharan African countries. “For example, roaming agreements between our respective mobile carriers and centralised transaction management for corporate customers will be explored,” explained September.

“We now have an opportunity to work with one of the strongest and biggest brands in the world, a company that owns and operates a global network and a company known for its innovation, quality products and outstanding customer service,” said September.

“The agreement calls on the respective companies to utilise each other’s core competencies, product portfolio and networks. This is not only a feather in our cap, but an opportunity to further bring the value from AT&T’s global network to Sub-Saharan Africa – value that we will channel to our customers.”

“We have charted a clear course for ourselves. The Telkom of today and tomorrow is about enhanced service provisioning for our customers and creating increased value for our stakeholders. The strategic relationship that now exists between Telkom and AT&T provides significant impetus for this drive. It will generate new revenue opportunities and new chances to market our products and services. Above all, it will put us in a better position to meet customer needs, which is our number one priority,“ concluded September.

*AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T, Inc.

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