Telkom boss Maseko seeks innovative WOAN auction
Telephony group Telkom says it looking forward to see modernisation by authorities in the auctioning of both wholesale open access network (WOAN) and the International Mobile Telecommunication (IMT) spectrum by end of this month.
The communications regulator, the Independent Communications Authority of South Africa (ICASA), yesterday announced the invitation to apply (for both the WOAN and the IMT spectrum, also known as high-demand spectrum) will be published no later than 30 September 2020.
The regulator said the auction of the high-demand spectrum, which was originally contemplated to take place during December 2020, will be completed by no later than 31 March 2021.
Reacting to the news today, Sipho Maseko, Telkom’s group CEO, welcomed the move “as the kind of decisive action needed to drive South Africa’s economic recovery.
“We are looking forward to seeing innovation in auction design by the new council, as auction design influences market structure,” says Maseko.
“South Africa has seen the adverse effects of the lack of effective competition in the sector. We hope the new council will also consider the impact of current spectrum trading deals in the design of the auction and use the opportunity presented by the ITA to deliver effective competition.”
Meanwhile, Telkom dismissed rumours that gripped the markets yesterday that it was preparing for a rights issue.
The company told shareholders yesterday in a statement on SENS that “Telkom has no intention to do a rights issue”.
Speculation had been rife that Telkom was preparing for a rights issue as part of the company’s strategy to raise cash ahead of the spectrum auction.
“In the unlikely event where the board takes a decision to issue shares, an official announcement through the JSE SENS will be issued to inform all shareholders. Telkom remains comfortable with its balance sheet with a net debt to EBITDA of 0.7x as reported for the period 31 March 2020,” said Telkom in a statement.
“There has been no increase in debt since our annual results for the period 31 March 2020.”
Telkom explained that on 7 August 2020, it issued its Integrated Report for the year ended 31 March 2020 with notice of annual general meeting (AGM) scheduled to take place on 10 September 2020 and the Telkom board is requesting general authority for directors to issue shares for cash, “a standard resolution passed annually”.
It said: “In the upcoming AGM, the board is requesting to increase the threshold from 5% to 10%. Although the board does not expect to issue shares, they have taken a view to increase the threshold to provide the board agility and flexibility to enable an effective post-COVID-19 response, should this be necessary.
“The board would like to reiterate that the amendment of the resolutions is not an expression of Telkom’s intention to issue shares to the market.”