TELKOM South Africa Ltd, Africa's largest fixed-line phone company, may be sold to Mvelaphanda Holdings Ltd, run by South African businessman Tokyo Sexwale, and Vodafone Group Plc.

Telkom shares surged as much as 15 percent, valuing the company at 84.2 billion rand (US$10.9 billion). Mvelaphanda bid to buy all of Telkom, contingent on the sale of its 50-percent holding in mobile operator Vodacom Group Ltd, Pretoria-based Telkom said yesterday. London-based Vodafone, which owns the other half, offered to purchase an additional stake.

A sale would dismantle South Africa's former fixed-line phone monopoly, which is 39-percent owned by the government. Mvelaphanda, which holds 47 percent of mining company Mvelaphanda Resources Ltd, has been diversifying with purchases of media firms.

Buying more of Vodacom would add to Vodafone's business in emerging markets, where wireless growth is faster than in developed countries. "We might see more interested parties coming out," said Rajay Ambekar, an analyst at Cadiz African Harvest Asset Management, which manages about US$7.3 billion.

Telkom will evaluate all offers, the company said according to Bloomberg News.

Wireless operators are looking to Africa for growth because only about 20 percent of the continent's 900 million people subscribe to a mobile phone service, according to a Cap Gemini report last month.

Regulators in Africa are encouraging competition, and 10 to 15 new mobile licenses may be up for sale, Cap Gemini said. In Britain, by contrast, there are more wireless accounts than there are people.

Telkom South Africa had 4.6 million fixed-line customers as of September 30, down 1.2 percent from a year earlier. Ambekar said Telkom's fixed-line business is worth as much as 50 billion rand and its stake in Vodacom between 65 billion rand and 70 billion rand.

Vodacom had 34 million customers at the end of March, said Bloomberg News.