Moholi talks of Telkom ‘choices’

Nombulelo Moholi chooses her words carefully as a government decision on Telkom's future appears to be looming. By Duncan McLeod.

Nombulelo Moholi

In what was clearly a very carefully worded speech delivered at the annual Satnac conference on Monday, Telkom Group CEO Nombulelo Moholi hinted there could be a solution to delivering broadband to all South Africans on a “sustainable basis” for the telecommunications operator.

Moholi’s comments came just a day ahead of the start of cabinet lekgotla, scheduled for the next three days, at which communications minister Dina Pule may report back to her ministerial colleagues about her plan for Telkom. Among other areas, the lekgotla will focus on progress made on the implementation of the presidential infrastructure coordination commission and an implementation programme for the planning minister Trevor Manuel’s National Development Plan.

At the end of May, when Pule said cabinet had elected not to support a plan to sell 20% of Telkom’s equity to Korea’s KT Corp, the minister was given three months to present a plan to turn around Telkom’s fortunes.

A number of options are reportedly being considered, among them buying out Telkom’s minority shareholders and delisting the company from the JSE in what would amount to its renationalisation. Government, which floated Telkom in 2003, retains a direct 39,8% stake in the company. It’s understood reliably that one of the plans being actively discussed is folding Broadband Infraco and Sentech, two state-owned enterprises, into Telkom to form a larger state-owned infrastructure provider.

On Monday, Moholi chose to address the uncertainty facing Telkom by asking the Satnac audience a series of questions

“How do we ensure the company’s continued sustainability?” she asked. “How do we ensure the company is a vehicle for broadband penetration in underserviced areas? Are these choices contradictory? Or can these two questions be phrased as a classical dilemma in a positive way?”

Moholi added: “How do we ensure the company delivers broadband sustainably in all areas? Phrased this way, I think we are on a path to a solution.”

In a statement on 1 June, explaining why it had decided not to support the KT deal — blocking it in the process — cabinet said Telkom was a “key and strategic asset in the roll-out of [telecoms] infrastructure and in the effort to improve the skills of our citizens”.

“Government recognises the need for Telkom to implement an urgent turnaround strategy and, to get the company back on its critical centre of delivering ICT services to all South Africans, new options will have to be considered by both Telkom and government in this regard.”  — (c) 2012 NewsCentral Media