ICASA rejects Telkom Swiftnet BEE partner
The Independent Communications Authority of SA (Icasa) has rejected the proposed black economic empowerment (BEE) partner of Telkom subsidiary Swiftnet, forcing the fixed-line operator to search for a new partner once again.
Last year in February, Radio Surveillance Consortium (RSC), which includes Radio Surveillance Security Services (RSSS) and Royal Security, agreed to buy 30 percent in the company for R55 million.
The transaction was approved by the competition commission last year, but Icasa had rejected it because it had not been satisfied with the BEE status of RSC, said Telkom.
A source close to the transaction said RSC was not broad-based, as required by the industry charter and the government’s codes of good practice.
Last year, technology newswire ITWeb quoted an unnamed RSC spokesperson who said the company was fully compliant with the department of trade and industry’s black empowerment codes.
Telkom said on Friday that it had resubmitted the proposed transaction to Icasa "fairly recently." But the company added that it would continue looking for new BEE partners for Swiftnet that would be acceptable to Icasa.
Swiftnet, which trades as Fastnet Wireless Service, provides services such as retail credit card security, telemetry, vehicle tracking and cheque verification.
It holds a telecoms and radio frequency licence, which requires that it sells equity to a black-empowered company.
This means that without a black empowerment partner, Swiftnet is in contravention of its licensing conditions.
Telkom has been struggling for more than four years to find a suitable black company to buy shares in Swiftnet.
At one point the fixed-line operator proposed the complete integration of Swiftnet into its business, but this was rejected by Icasa, which insisted that the licence conditions be observed.
RSSS was started in 1996. It had initially provided the security industry with domestic household and commercial alarm installation and monitoring services.
During 1997 RSSS had focused on the corporate market, recruiting Telkom as its first client, said the company.
Telkom bought the 40 percent stake in Swiftnet that it did not already own from empowerment group VHR Wireless in 2001.
According to Fastnet, companies that are using its technology include Furniture City, Clicks, Rennies Travel, Metcash Africa, Makro and Netstar.
RSSS and Icasa were not available for comment.
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