Telkom dumped on ICT changes
03/09/2004 09:53 - (SA)
Cape Town - News of changes to telecommunications policy announced by Communications Minister Ivy Matsepe-Casaburri has seen investors dump Telkom shares as the utility faces a real threat to its monopolistic pricing policies.
Telkom took a knock in opening trade on Friday the JSE Securities Exchange South Africa (JSE).
By 9:20 the company's share price, which more than trebled after its listing last year, has fallen R4.50 or 5.8% after it closed at R77.50 on Thursday.
The volume traded so far is 512 822 shares, in 143 deals.
Total value traded was R37.7m.
Telkom said on Thursday in reaction to the liberal changes in the ICT sector, it was not warned or consulted before the announcement.
The changes, which could result in reduced costs for business by mid-2005, pose a threat to Telkom and the second fixed-line network operator's profitability.
At a parlaiment briefing on Thursday Matsepe-Casaburri said the amendments were part of government's aim to "reduce costs, stimulate competition and growth and expand the availability of services".
The amendments make it possible to create a so-called virtual telecommunications network and enables any organisation to offer telephone services such as payphones and laying cables.
Other services, such as voice calls over data networks such as the internet (VoIP), will also be legal now.
The amendments, which come into effect on February 1 next year, include the following:
* Cellphone companies may now use any supplier's fixed lines - thus far, cellphone service providers were dependent on Telkom for the provision of connection lines;
* The provision of payphone facilities and equipment will be expanded to allow any person or organisation to apply for a licence in any area. A licence will soon not be necessary anymore.
* Any value-adding service provider (VANS) will be able to provide voice transmission over any medium, including the internet.
* Any business can offer value-adding services. Consumers will therefore no longer be reliant on Telkom or the promised second fixed-line operator;
* Private telecommunication services and equipment may be traded and companies with private internal network services will be able to sell, rent out or transfer the rights of excess facility and capacity. Matsepe-Casaburri said this would result in better utilisation of equipment and facilities.
Edited by Fadia Salie
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">Telkom said on Thursday in reaction to the liberal changes in the ICT sector, it was not warned or consulted before the announcement.<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">
If I can quote Tito Mboweni, "tough Bru".
<b><hr noshade size="1"></b><font size="2"><font color="red"><b>You can take Telkom out of the Post Office but you can't take the Post Office out of Telkom.</b></font id="red"></font id="size2">