Telkom says it will sell Q-Trunk, its wholly-owned public radio-trunking subsidiary, in order to focus on its core business.
The company said over the weekend that it intends to follow an open-tender process in the sale, by making a request for bids.
CEO Sizwe Nxasana admits that Q-Trunk operates in a highly competitive market that "continues to demand new and better services, which will require infrastructure investment".
According to the company annual report, Q-Trunk was expected to lose close to R27 million in the 1999 financial year, after provision for a R15 million loss in 1998. The 100% shareholding is listed at a cost price of R10 million.
"The proposed equity sale will enable Q-Trunk to grow its own network and customer base, while allowing Telkom to focus on its broader commitments," Nxasana said in a statement.
But he expects the loss-making operation to be an attractive proposition. Telkom says the Q-Trunk network covers 70% of SA and has a base of more than 6 900 connections. Nxasana says it makes sense for Telkom to concentrate on its network roll-out and cut the subsidiary free. "Telkom, as the owner of Q-Trunk, is not really in a position to give the subsidiary the attention and resources it deserves," he says.
Request for bid documents will be available from 7 September, for a fee of R5 000, and the submission of bids is expected to close on 4 October.
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