The partial sale of Thintana Communications` Telkom stake comes as no surprise to a Gartner analyst, who says he sees no evidence that the telecommunications utility has a vision of where it is going.
Bill Hahn, an analyst with international research firm Gartner, told ITWeb that by year-end, the South African telecommunications sector would have taken a step backwards rather than progressing.
Hahn was reacting to the news that Thintana, which comprises the US telecommunications group SBC Communications and Telekom Malaysia, would sell half of its 30% holding of Telkom shares. The split between SBC and Telekom Malaysia is 18% and 12% respectively.
According to an SBC filing with the US regulatory authority, the Securities Exchange Commission, the sale will bring it about $542 million, or R3.38 billion. Telekom Malaysia`s share of the sale is expected to bring it about two-thirds of the SBC amount.
"Face it. What makes Telkom so special that Thintana should hold the shares?" Hahn says. "SBC is consolidating some of its operations, and Telkom has no technology vision and so why should they keep their stake? Telekom Malaysia has other bigger and potentially more profitable investments."
Hahn says it makes strategic sense for SBC to pursue opportunities in Eastern Europe, "where the market is opening up rapidly".
Telekom Malaysia has said it intends to spend the proceeds of its Telkom share sale on investments at home. It is also gearing up for a $500 million investment in a cellular phone venture in India.
Hahn says Telkom had not developed or clarified a vision on how it plans to roll-out technology and has focused on defensive strategies, although it still has a monopoly situation.
He adds that the country needs broadband access, which means fixed-lines are required, an area where Telkom has failed. "One cannot depend on mobile companies to supply that kind of service - they are not geared for it."
Hahn says the problems with the second national operator also mean its licence probably would not be awarded this year and the country would suffer economically as a result.
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