Telkom sale: it’s not easy
THE STATE NEEDS TELECOMS PROVIDER MORE THAN THE OTHER WAY AROUND The jewels are indeed being sold for a pittance.
It’s ironic that the two keynote addresses (from government and Telkom) on day one of the operator’s Southern Africa Telecommunication Networks and Applications Conference (SATNAC) were centred around public-private partnership in unlocking growth from the digital economy, given that government’s going to “partially” reduce its 39% shareholding in Telkom.
In many ways, government and Telkom are closer now than at any point since its (semi-) privatisation 20 years ago.
Perhaps it’s precisely because it’s been left alone to do what’s “best for Telkom”. It seems to be government’s preferred implementation partner for its broadband policy, SA Connect.
Government (or Telecoms Minister Siyabonga Cwele at least) gets that internet access and the ICT (Information, Communication and Technology) sector is key to economic growth. The problem is, however, government “realised” this back in 1998 when it “identified digital transformation as central to transformation”, again in the National Development Plan over five years ago, and in the Integrated ICT Policy White Paper a year ago.
That the telecoms and ICT sector’s contributed to SA’s economic growth over the last 20 years is despite government’s efforts, not because of them.
Government must move quicker, especially since the wholesale open access network – a central feature of the policy – will unlock desperately-needed mobile spectrum for all operators.
In Telkom CEO Sipho Maseko’s prepared remarks (he withdrew from the programme), he urged that “speed is required” on policy setting “as we’ve seen used in cases in India, Singapore and Ghana where meaningful impact comes 10-20 years after strong policy intervention”.
Hugo van Zyl, chief technology and information officer at the group’s Openserve unit, stressed the need for public and private sector collaboration on enabling the digital economy and driving growth. This will be especially important when connecting the poor and those in rural areas.
Maseko’s prepared remarks said “we need to acknowledge that connecting the ‘less viable’ is the less straight forward challenge to solve, but one of the first priorities if we are to ensure that people can be reached. The digital economy demands the fuel of ‘connectivity’, and we must find a way to provide this to the less viable scenarios if we are to truly move the dial of South Africa’s economic growth”.
Government needs an implementation partner (Telkom) to provide (subsidised/ free) access to parts of the market who can’t afford it or don’t have it.
It’s a win-win. Government gets to spend money with a company it owns a large share of to connect people. Telkom gets paid for the service and network assets which would have decayed can be renewed or upgraded. Citizens get access.
This is why government’s sale of its Telkom stake is complex. It’s enjoyed the privilege of being able to exert influence… the two collaborate and co-operate a lot. Telkom (post sale) could still help government achieve its objectives, but that influence will have waned.
Hilton Tarrant works at immedia. He’s attending SATNAC as a Telkom guest.