Transtel, Eskom will be Telkom competition, says Radebe

By Staff Writer for Telkom
Johannesburg, 11 Aug 2000

During the introduction of the new privatisation framework yesterday, the department of public enterprise revealed no expected valuations or specific timetables for the privatisation of Telkom. However, minister Jeff Radebe did confirm that a combination of the existing Transtel, Eskom and Sentech networks is expected to form the basis for the second national operator.

A business case for the consolidation of the telecommunications capabilities of the three organisations has already been completed, he said.

"This consolidation draws on international best practice where transmission grids and rail reserves are used to serve as telecommunications corridors. This reflects both a rationalisation of similar capabilities across SOEs [state-owned enterprises] and an enhancement of their composite value."

Radebe said that an office had been set up within his department to handle the initial public offerings (IPOs) for the various state enterprises undergoing restructuring, and that the first IPO to be handled would be that of Telkom. The first phase of the listing is expected to be completed by the end of 2001.

A request for proposals for a global co-ordinator for the IPO will shortly be published in the state tender bulletin.

The long-awaited consolidation of the IT departments of Denel, Transnet and Arial was also again confirmed. Arial Technologies, the former Denel IT arm, Datavia, the Transnet IT company, and Eskom IT are to be merged as part of the broad restructuring programme, scheduled for completion by 2004.

Radebe said it would not be sensible to release a detailed timetable for the restructuring, including the Telkom listing, or the expected value of the company. "No country in the world that values its integrity has exposed its hand in a potentially volatile investment environment. Our responsibility as a shareholder is to secure the highest value for our assets."

Telkom welcomed the release of the policy framework. "The company will continue to support the process leading up to the Telkom initial public offering," CEO Sizwe Nxasana said in a statement.