South African telephone operator Telkom posted little full-year profit this week, in line with expectations, and its chief financial officer said it would consider selling its struggling Nigerian unit.

Africa’s largest fixed-line operator has been battered by high operating costs at home and hefty losses from its Nigerian business, Multi-Links, which has a tiny presence in a competitive market. Revenue has also dropped after last year’s sale of a stake in Vodacom, the mobile-phone operator that had been a major profit driver.

Telkom plans to launch its own mobile-phone business, but faces stiff competition from established players such as MTN Group and smaller firm Cell C

“What needs to be done essentially is for Nigeria to be either sold or turned around and for costs to be reduced in South Africa,” said David Lerche, an analyst at Avior Research. Chief Financial Officer Peter Nelson told Reuters that selling the Nigerian unit is “one option” and that Telkom has talked to banks about such a deal.

“In the last year we’ve tried to enter into a number of discussions with other players but … no one wants to invest in Nigeria,” he said in an interview. Multi-Links is one of four mobile operators using the CDMA technology platform in a market overwhelmingly dominated by the rival GSM standard. Telkom said in a statement it wrote down the value of the unit by 5.2 billion rand ($690.2 million) in the financial year to end-March.

“They should absolutely not stick it out. Run for the hills. The CDMA which they’re doing in Nigeria is a very good technology, but there’s not enough people on it … This business, in its current form, will not be able to make worthwhile profits,” said Avior’s Lerche.

“The difficult decision for us is to continue funding Multi-Links, it can’t really raise bank funding and third-party funding. Even if it breaks even we’re looking at putting in another $100 million,” Nelson said. Telkom aims to have the Nigerian unit break even on an earnings before interest, taxes, depreciation and amortisation (EBITDA) basis this year, Nelson said.

Telkom said headline earnings per share from continuing operations fell 92 per cent to 46.8 cents in the year to end-March. Headline earnings, which strip out certain one-time items, are the main measure of earnings in South Africa. The profit results were widely expected after Telkom said last month it expected to post little or no profit. In South Africa, Telkom has been hurt by ageing inventory and higher employee costs. Competition from mobile operators and a new fixed-line firm, Neotel, also weighed on revenues.

Chief Executive Reuben September, who has led the company for the past three years, is due to step down in autumn, leaving an uncertain future for the mobile-phone operation.

Normalised headline earnings per share, which strip out most non-recurring items, fell 11.2 per cent to 473 cents. Shares of Telkom rose as much as 5.5 per cent following the earnings, after it said it would raise its dividend by 9 per cent to 125 cents, and pay a special dividend of 175 cents.

Telkom shares had trimmed gains and were up 2.1 per cent at 37.68 rand by 1418 GMT, outperforming a 1.3 percent rise in Johannesburg’s All-Share index