SNO shareholding complete

Johannesburg, 14 Feb 2005

The second national operator (SNO) finally has a full complement of shareholders, after minister Ivy Matsepe-Casaburri announced at the weekend that the Indian-based Tata Group would be awarded the remaining 26% shareholding.

The Tata Group, represented in SA by Tata Africa Holdings, has investments including Tata Infotech, which operates in India, SA and several other countries, while the organisation also owns Tata Technologies and has shares in dual-listed telecommunications giant VSNL. Tata Africa`s telecommunications experience within the SNO will be provided by VSNL.

The other shareholders in the SNO include CommuniTel and Two Consortium, each with a 12.5% shareholding in SepCo, which - along with Tata`s 26% - owns the 51% strategic equity share of the operator.

Nexus Connexion owns the 19% black empowerment component of the SNO, with the remaining 30% held equally by Transtel and Eskom Enterprises.

"The stakeholders must now finalise the shareholder agreements and business plan as a matter of urgency, so that the regulator can be requested to issue the licence to the SNO at the earliest opportunity," says Matsepe-Casaburri.

"I have satisfied myself that they have complied with the criteria set out in the process for the allocation of the 26% equity stake in the SNO that was published in the Government Gazette on 26 October 2004."

Having applied her mind to the application for the 26% stake - Old Mutual Asset Managers was the other bidder in the running - Matsepe-Casaburri reportedly made the decision on Friday, and following the announcement wished VSNL well.

"This is an extremely important venture in the managed liberalisation process of the telecommunications sector, and it is important that VSNL and the other stakeholders work together regarding the integration of all parties concerned in the SNO."

While none of the other shareholders were available for comment, the Communications Users Association of SA (CUASA) says it welcomes the announcement by the minister and hopes the various partners in the SNO can resolve their differences and begin moving forward.

"The SNO is long overdue and it would be great if it could be up and running by the second or third quarter of this year," says spokesman Ray Webber.

"Sadly, I can`t help thinking that even having an SNO won`t cause any big changes in the industry in the short-term. It will take time for the effect to be felt, but at least it will offer some choice for consumers."

He says CUASA also takes issue with President Thabo Mbeki alluding - in the State of the Nation address - to the fact that it was not government`s fault that the SNO had dragged on so long.

"After two bidding processes, all that government could do was award 25% of the total 51% and in so doing, it watered down the control of the SNO to a point where there has been plenty of in-fighting over this issue, so I can`t see how government can claim this was not its fault.

"I also can`t see the SNO being able to offer much in the way of competitive pricing in areas where they will initially have to piggyback on Telkom`s infrastructure, since they will be the monopoly`s rival," says Webber.

"The key to ensuring they are capable of offering true competition even when using Telkom infrastructure will be strong regulation by the Independent Communications Authority of SA."