Operator reportedly considering making a $1 billion bid for its rival.

Telkom SA may have rekindled its interest in acquiring rival South African operator Cell C, and is reportedly mulling a $1 billion bid for the company.

According to unnamed sources cited by Bloomberg on Tuesday, Telkom SA is among a handful of prospective suitors approached by investment banks on the hunt for companies with the financial means of making an offer.

Telkom SA held talks to acquire 100% of Cell C in November 2015. Had a deal been struck, it would have enabled the former to establish a stronger presence in the mobile market. However, both sides walked away after failing to agree on a price.

Since then, Cell C has been working on a recapitalisation plan under which The Prepaid Company (TPC), a unit of airtime distributor Blue Label Telecoms, plans to acquire 45% of the operator for 5.5 billion rand (€354.3 million), becoming its biggest single shareholder.

Cell C’s current parent, Oger Telecom subsidiary 3C Telecommunications, would see its stake cut to 30% from 100%, while the remaining 25% of the company would be acquired by Cell C’s management.

However, minority shareholder CellSAf is opposed to the plan. Reuters reported last November that it filed a legal challenge, claiming it was not given a chance to comment on the proposed restructuring.

According to Tuesday’s Bloomberg report, Cell C has until the end of February to seal a deal with Blue Label.

"The Cell C recapitalisation remains on track and is supported by the equity investors as well as the existing lenders to the business," said Cell C spokeswoman Karin Fourie, in the report.