First, consider the mess created in the lucrative telecommunications sector, in which 30 percent of state-owned Telkom was sold to a Houston-Kuala Lumpur alliance. The cost of local calls skyrocketed, leading the vast majority of new lines to be disconnected. Meanwhile, 20,000 workers were fired. Attempts by the government to cap fixed-line monopoly pricing were blocked by the Texas-Malaysia joint venture with a court challenge and a serious threat to sell their Telkom shares in 2002. As a result, Telkom's 2003 initial public offering on the New York Stock Exchange raised only a disappointing $500 million. Thus, in the process an estimated $5 billion of Pretoria's own funding of Telkom's late 1990s capital expansion evaporated. A pact on pricing and services between the two main private cellular operators and persistent allegations of corruption combined to stymie the introduction of new cellular and fixed-line operators.
