Shareholders benefit?

[Moederloos]

After reading various articles, and in particular the article about Johannesburg introducing their own network, I have to wonder how shareholders benefit from Telkoms policies.

How many shares would an individual own, and what is the return on investment per share? Does the money earned from the share counteract the high bills that shareholder receives from Telkom. Even government, with a 38% stake? What is governments Telkom bill per month?

If I bought 1000 shares in Telkom a year ago, I would have spent around R80 000 and made a "profit" of R50 000 or so if I sold the shares now. My Telkom bill in the same time has been around R25 000. Since my bill is not business related, I would not be able to claim tax, but I would pay CGT on the R50 000.
Needless to say, not many in SA could afford 1000 shares (myself included!), but it does not seem worth the financial risk to have made an effective R10 000 or so - far better for the "shareholder" to have had cheaper Telkom costs - that would have saved me a guaranteed R20000 or so per year.

 

[bekdik]

After reading various articles, and in particular the article about Johannesburg introducing their own network, I have to wonder how shareholders benefit from Telkoms policies.

How many shares would an individual own, and what is the return on investment per share? Does the money earned from the share counteract the high bills that shareholder receives from Telkom. Even government, with a 38% stake? What is governments Telkom bill per month?

If I bought 1000 shares in Telkom a year ago, I would have spent around R80 000 and made a "profit" of R50 000 or so if I sold the shares now. My Telkom bill in the same time has been around R25 000. Since my bill is not business related, I would not be able to claim tax, but I would pay CGT on the R50 000.
Needless to say, not many in SA could afford 1000 shares (myself included!), but it does not seem worth the financial risk to have made an effective R10 000 or so - far better for the "shareholder" to have had cheaper Telkom costs - that would have saved me a guaranteed R20000 or so per year.

What's your Telkom bill got to do with shares?

The share market doesn't revolve around the 1000 share buyer. It revolves around the corporate investor, such as finacial institutions, who trade in the millions of shares. Now do the maths again.

 

[stoke]

/me sides with Moederloos ...

Anybody making money out of trading teklom shares and getting the odd dividend would be better off simply having lowest possible cost telecoms.

But to proove this, you need the teklom bill from a trader, and their clients [who typically call in].

 

[Moederloos]

What's your Telkom bill got to do with shares?

The share market doesn't revolve around the 1000 share buyer. It revolves around the corporate investor, such as finacial institutions, who trade in the millions of shares. Now do the maths again.

It is the very institutions that buy huge volumes of shares that have the highest bills. Either way, the very shareholders that Telkom is "protecting", are the ones that are being hit by high costs anyway. Where is the protection in that?

 

[Jongi]

If you think about it Telkom's biggest shareholder is the poor. Hence why government is probably not too bothered about driving down telkom rates quickly. The debate of course is whether the industries that could open up from lower bandwidth costs would mean even greater government revenue from those industries.

 

[Moederloos]

If you think about it Telkom's biggest shareholder is the poor. Hence why government is probably not too bothered about driving down telkom rates quickly. The debate of course is whether the industries that could open up from lower bandwidth costs would mean even greater government revenue from those industries.

While I do not know if the statement above is correct, but, assuming it was - this again highlights the fact that shareholder's are not benefiting from Telkom's high prices. Great, someone in an informal settlement makes R50 profit in dividends - but that person has no access to affordable telephony - not good.

 

[Jongi]

Moederloos: I didn't mean it like that. I meant government gets money into its coffers from telkom through dividends and taxes. Those are higher the more profit Telkom makes. The money in the coffers will be used by government to,amongst others, try alleviate the plight of those in informal settlements. Again whether that is an efficient way of doing it is debatable seeing as I do not have the numbers. I would guess it is more likely inefficient from a medium to long-term viewpoint.