Keep Telkom out of foreign Oger’s hands
THE government’s interference in Telkom has been an unmitigated disaster. Foreign partners, brought in to run the business, walked away rich and left the communications landscape poor. They abused the monopoly that Telkom was granted by overcharging and underserving the public. And Telkom’s leaders are political appointees, not tough, business-savvy professionals able to handle difficult tasks well.
But the answer to Telkom’s woes is not to flog its shares to a foreign investor, now that Oger Telecom has bid for a stake.
It makes sense for the Saudis. Their sister company, Cell C, is struggling, and gaining part ownership of Telkom would oblige the two to work together. They could offer compelling fixed and mobile packages, and negotiate friendly deals for Cell C to use Telkom’s backbone.
Oger Telecom may offer a tasty premium to shareholders, and the government could use this as an exit strategy to cash in its 38,9% stake. It could even claim to have the public interest at heart, since industry players continually beg the government to pull out and let them set their own pace. But selling its stake in a national asset to foreigners would be a big mistake. Foreign masters, with a 60% stake in Cell C, would not have the public’s welfare at heart.
Yes, Telkom would get a much-needed kick up the backside by experienced managers blowing the cobwebs out of its board, management and services. Excellent in theory. But the crux of the issue is that South Africans need decent and cheap telecommunications services. Profit-oriented foreigners care nothing for that.
The answer is not for the government to remain in charge and run Telkom like some sleepy state department. It needs dynamic executives, with global ambition, but who also understand SA’s needs — people tempered by a conscience, so that the average citizen is not trampled in the quest for profit.
It is an enormously tricky balance, so the government may need to retain its ownership stake — but pare its influence — to strike that balance.
There are certainly no easy answers, but flogging Telkom to foreigners is not the solution.
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