Indicator Lights on
Second network operator
By Marina Bidoli
Finally, there is a glimmer of hope for the creation of a rival to Telkom.
Communications minister Ivy Matsepe-Casaburri's undertaking not to progress with licensing the second network operator (SNO) except on three weeks' notice resulted in Nexus Connexion, the empowerment group headed by Kennedy Memani, postponing its urgent interdict on Tuesday.
"The high court made the minister's undertaking an order of court," says Nexus' legal adviser, Daniel Pretorius.
The judicial review application is continuing, though Nexus remains hopeful that the problems will be resolved before the hearing date.
The FM understands that the leadership of new communications director-general Lyndall Shope-Mafole is behind this new, positive outlook from Nexus, which has been challenging the minister's inclusion of CommuniTel and Two Consortium as part of the controlling bloc in the SNO. Shope-Mafole "is a breath of fresh air and understands all the issues", says one commentator.
The minister has not yet provided reasons for her decision, nor has she filed an answering affidavit.
There are also questions on how she chose the two bidders for the controlling 26% stake in the SNO. The question is whether there was an open bidding process, and whether the call for bids was widely publicised and marketed to overseas investors.
Old Mutual Asset Managers (OMAM) and Tata Africa Holdings, a subsidiary of Indian conglomerate Tata, have been short-listed.
The FM understands that the third unnamed bidder - which was disqualified for not meeting the minister's deadline - was Portugal Telecom, represented through Sandton-based boutique corporate finance house Merchant West. "The state-owned operator needed more time," says one source.
The winner of the 26% will control the SNO with CommuniTel and Two Consortium. Together they comprise SepCo, which controls the SNO with a 51% stake. The remaining shareholders are Nexus (19%) and state enterprises Transtel and Eskom Enterprises (joint 30%).
Tata, India's largest private-sector group, has interests in diverse industries and may bid with its 45% subsidiary, Indian long-distance carrier VSNL, which is listed in India and New York. Tata also has interests in software development and other technology firms, and is well placed to bring relevant skills and experience to the SNO.
Tata Africa has a stake in Consilience Technologies, the technology firm it owns with J&J group, headed by former communications minister Jay Naidoo. J&J was recently cited in the Sunday Times as being one of the parties considering the purchase of foreign equity partner Thintana's 15,1% stake in Telkom, but Naidoo is believed to have distanced himself from the Telkom bid. He had not responded to the FM's calls at the time of going to press.
Should OMAM win the 26% stake, this may cause problems with Nexus, which has previously expressed unhappiness with Old Mutual's possible involvement because it lacks telecom experience and is close to CommuniTel. Nexus felt that this would give arch-rival CommuniTel de facto control of the SNO.
Old Mutual is also a 25% shareholder in J&J.
The SNO's controlling shareholder is expected to invest at least R1bn in the operator, but the business plan will need substantial revision in light of pending market liberalisation (see page 38).
Independent Communications Authority of SA (Icasa) chairman Mandla Langa has made it clear the regulator will not rubber-stamp the SNO - it wants to ensure it licenses a sustainable competitor to Telkom.
Many commentators believe that at best the SNO will be a niche player. It cannot hope to compete head-on with Telkom in all its markets.
Financial Mail, 29 October 2004
Second network operator
By Marina Bidoli
Finally, there is a glimmer of hope for the creation of a rival to Telkom.
Communications minister Ivy Matsepe-Casaburri's undertaking not to progress with licensing the second network operator (SNO) except on three weeks' notice resulted in Nexus Connexion, the empowerment group headed by Kennedy Memani, postponing its urgent interdict on Tuesday.
"The high court made the minister's undertaking an order of court," says Nexus' legal adviser, Daniel Pretorius.
The judicial review application is continuing, though Nexus remains hopeful that the problems will be resolved before the hearing date.
The FM understands that the leadership of new communications director-general Lyndall Shope-Mafole is behind this new, positive outlook from Nexus, which has been challenging the minister's inclusion of CommuniTel and Two Consortium as part of the controlling bloc in the SNO. Shope-Mafole "is a breath of fresh air and understands all the issues", says one commentator.
The minister has not yet provided reasons for her decision, nor has she filed an answering affidavit.
There are also questions on how she chose the two bidders for the controlling 26% stake in the SNO. The question is whether there was an open bidding process, and whether the call for bids was widely publicised and marketed to overseas investors.
Old Mutual Asset Managers (OMAM) and Tata Africa Holdings, a subsidiary of Indian conglomerate Tata, have been short-listed.
The FM understands that the third unnamed bidder - which was disqualified for not meeting the minister's deadline - was Portugal Telecom, represented through Sandton-based boutique corporate finance house Merchant West. "The state-owned operator needed more time," says one source.
The winner of the 26% will control the SNO with CommuniTel and Two Consortium. Together they comprise SepCo, which controls the SNO with a 51% stake. The remaining shareholders are Nexus (19%) and state enterprises Transtel and Eskom Enterprises (joint 30%).
Tata, India's largest private-sector group, has interests in diverse industries and may bid with its 45% subsidiary, Indian long-distance carrier VSNL, which is listed in India and New York. Tata also has interests in software development and other technology firms, and is well placed to bring relevant skills and experience to the SNO.
Tata Africa has a stake in Consilience Technologies, the technology firm it owns with J&J group, headed by former communications minister Jay Naidoo. J&J was recently cited in the Sunday Times as being one of the parties considering the purchase of foreign equity partner Thintana's 15,1% stake in Telkom, but Naidoo is believed to have distanced himself from the Telkom bid. He had not responded to the FM's calls at the time of going to press.
Should OMAM win the 26% stake, this may cause problems with Nexus, which has previously expressed unhappiness with Old Mutual's possible involvement because it lacks telecom experience and is close to CommuniTel. Nexus felt that this would give arch-rival CommuniTel de facto control of the SNO.
Old Mutual is also a 25% shareholder in J&J.
The SNO's controlling shareholder is expected to invest at least R1bn in the operator, but the business plan will need substantial revision in light of pending market liberalisation (see page 38).
Independent Communications Authority of SA (Icasa) chairman Mandla Langa has made it clear the regulator will not rubber-stamp the SNO - it wants to ensure it licenses a sustainable competitor to Telkom.
Many commentators believe that at best the SNO will be a niche player. It cannot hope to compete head-on with Telkom in all its markets.
Financial Mail, 29 October 2004
