Time for company structure change
Vodacom is held 50% each by Telkom (TKG) and Vodafone in the UK, but Vodafone has recently put in a bid for a majority in Vodacom – something it has long been seeking – and Telkom is being sniffed at by Mvela and other consortium partners.
Something has got to give if full value is to be unlocked, indicated Knott-Craig.
He added that this did not mean the different components of the group did not "love each other", but that the changes would provide better direction.
UK mobile phone operator Vodafone early last week made a non-binding offer for 12.5% of Telkom SA’s stake in Vodacom Group, according to media reports.
Earlier Telkom said it had been approached by Vodafone to buy a portion of Telkom’s 50% stake in Vodacom.
If the bid were successful Vodafone’s stake in Vodacom would increase to 62.5% from 50%.
Separately Telkom also received a letter from a consortium interested in making an offer for all of Telkom, conditional on it spinning off its entire stake in Vodacom.
The consortium is made up of South African politician-turned-businessman Tokyo Sexwale’s Mvelaphanda Holdings, New York-listed Och-Ziff Capital Management LLC (OZM) and other strategic backers.
Vodacom on Monday reported another impressive performance, with revenue in the year ended March 2008 up 17.1% to 48.2 billion rand.
The total number of SA customers increased by 7.9% to 24.8 million from 23.0 million in 2007 and the total number of customers was reported up 12.7% to 34 million.
Knott-Craig tried to put the gainsayers at rest by saying that he felt SA was not a declining market.
"There are a couple of years of good growth left in SA," he said.
He added, though, that growth elsewhere in Africa had outpaced SA’s, with Lesotho the best performer, with profit from operations there up a whopping 64%.
"Everything is going right in Lesotho right now," he said.
Knott-Craig concluded by saying: "You cannot have enough broadband in this country or in any country."
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