May 15 (Bloomberg) -- South Africa’s telecommunications regulator said Telkom South Africa Ltd. will need its permission before it can sell its stake in Vodacom Group Ltd., the largest provider of wireless services to South Africans.

Telkom, Africa’s largest fixed-line operator, plans to sell a 15 percent stake in Vodacom to Vodafone Group Plc for 22.5 billion rand ($267 million). The remaining 35 percent of Vodacom will be listed on Johannesburg’s stock exchange on May 18. The listing is still going ahead pending further legal advice, Vodacom said in an e-mailed response to queries today.

“They have to now wait for approval from us before listing,” Marcia Socikwa, a councilor with the Independent Communications Authority of South Africa, said in a telephone interview from Johannesburg today. “If they go ahead with the listing they will be in breach.”

Icasa, as the regulator is known, said in a statement today that it decided to rescind an April 16 decision not to intervene in the transaction after the Congress of South African Trade Unions approached the Pretoria High Court seeking to stop the sale. The regulator said it now plans public hearings on the transaction in mid-June.

‘Crown Jewel’

The Cosatu labor federation, in court documents filed on May 5, said the regulator should have considered the transaction because control of Vodacom will change after the sale, affecting its license conditions. It accused the regulator of abdicating its “legal obligations” to protect the public interest, Cosatu said. Vodacom is Telkom’s “crown jewel,” accounting for 77 percent of Telkom’s operating profit, the union said.

“Whilst Vodacom is seeking legal council, until a decision to the contrary is made, the listing is on track to take place,” Vodacom said. Telkom spokesman Pynee Chetty declined comment.

The federation may approach a court this weekend to seek an interdict to stop the listing, pending legal advice, Zwelinzima Vavi, the secretary general of Johannesburg-based Cosatu, said by mobile phone today. The regulator “made a mistake and should have gone this route in the first place.”

The regulator said it was concerned that a court hearing would only have taken place after the listing of Vodacom. The transaction needs to take place in an environment of certainty, Icasa said.

The federation’s efforts are the second attempt by workers to scupper the transaction. The Communication Workers’ Union tried to block the transaction last month, saying employees had not been properly consulted about the transaction. The court dismissed the application with costs on April 30.

To contact the reporter on this story: Nicky Smith in Johannesburg at nsmith38@bloomberg.net

Last Updated: May 15, 2009 12:13 EDT