The South African government has a large shareholding in Telkom, which has been a contentious issue for many years.
This monopoly maximized profits for Telkom’s shareholders, but hurt the South African economy and the country’s citizens because of high prices and the slow roll-out of broadband access.
The relationship was seen by many as unhealthy, because the government implemented policies to protect its assets rather than do what was good for the country.
This conflict of interest was clearly illustrated when former Department of Communications DG Lyndall Shope-Mafole famously said: “Why were we protecting Telkom? [It was] so that we could get big value for it because it was going [public on the stock market].”
The government is judge, jury, and executioner
The ANC, through its influence on government decisions, often dictates what must happen in the telecoms market – where it is a big player.
Many policy directions regarding South Africa’s telecoms landscape are based on decisions made at the ANC’s National Conference.
These ANC decisions touch on a wide range of telecoms policies, including spectrum allocation, broadband infrastructure, and even the direction which certain companies should take.
In 2012, for example, former Communications Minister Dina Pule made it clear that the future of Telkom lay in the hands of delegates at the ANC’s electoral conference.
It is therefore not surprising that the DA has called for Telkom to be fully privatised.
In 2012, the DA said the communication minister’s “amateurish and reckless meddling in the affairs of a listed company was intolerable, and setting the company on a path to bankruptcy”.
The government and the ANC’s influence does not stop with Telkom. The government also has a significant shareholding, and therefore influence, in other large telecoms companies.
The Public Investment Corporation (PIC), whose sole shareholder is the South African government, has a big shareholding in MTN, Telkom, and Vodacom.
This means the PIC has a direct influence on these companies, and is not scared to publicly share its views.
The latest example was when MTN appointed Rob Shuter as its new CEO. The PIC questioned the appointment of a white CEO, with speculation that it was not consulted before the move.
The government’s shareholding in telecoms companies
The relationship between the government, the ANC, and telecommunications in South Africa is complicated.
An easy way to demonstrate the influence of the party and the state is to show the government and PIC’s shareholding in various telecommunications companies, as detailed below.