PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA
NATIONAL ASSEMBLY
WRITTEN REPLY
QUESTION NO: 1025
DATE OF PUBLICATION: 12
QUESTION PAPER NO: 12
DATE OF REPLY: 8 September
Mr S E Kholwane (ANC) to ask the Minister of Communications:
(1) What is Telkomâs mobile strategy;
(2) whether this includes any strategy to merge with Cell C or any other
mobile operator; if not, what is the position in this regard; if so,
what are the relevant details?
NW1262E
REPLY:
I was advised Telkom as follows:
As recently as May 2009 Telkom sold part of its shareholding of Vodacom and
unbundled the rest to shareholders. As indicated by Telkom at the time,
the rationale of the transaction is to be found in the restricted nature of
the shareholders agreement between Telkom and Vodafone over Vodacom. This
agreement prevented Telkom from providing mobile telephony, not only in
South Africa, but also providing a competing business south of the Equator.
Vodacom, in terms of the agreement, was however free to enter the fixed
telecommunications market. Telkomâs investment in Vodacom was therefore
nothing more than a pure financial investment. If one also takes into
consideration the ongoing erosion from fixed line telephony to mobile
telephony, the damaging consequences of staying invested in Vodacom becomes
clear.
The freedom from the restrictive shareholders agreement gave Telkom the
ability to now deliver its own mobile capability in South Africa. Telkom
has also made it clear that it regards the acquiring of a mobile capability
as integral to its growth strategy and has used this as part of its
motivation to retain 50% of the proceeds from selling of a 15% stake in
Vodacom.
Telkom, as a listed company, operates under Regulations that requires that
any price sensitive information, which would include its mobile strategy,
should be released to shareholders in an equitable basis. Telkom is
currently at a very sensitive stage of the deployment of its mobile
strategy. Any public statements at this stage can compromise the Companyâs
competitive and negotiating positions.
It is therefore not possible to provide the required information at this
stage.