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Telkom success provides compelling case for private-sector involvement in SOEs
Eskom and other debt-laden SOEs would do well to follow Telkom’s model and open up to private investors
Telkom has once again proven itself to be a model state-owned enterprise (SOE). With many of its public-sector peers on the brink — most notably debt-laded Eskom — Telkom’s financial results for the year to end-March show the benefits of private-sector participation and of competition. The group said on Monday it made a profit after tax of R3.3bn in the year, an 11.5% increase. Service revenue from its mobile business, which is fast taking market share from the incumbents thanks in part to competitive pricing, surged 58.3% thanks to 85.9% growth in active subscribers, to 9.7-million customers. Telkom is hardly an SOE these days — the government only owns about 40% of the network operator, which operates independently of the state and is answerable mainly to private shareholders. And unlike many other SOEs, which can be complacent as they have no real competition, it has to take on formidable competitors and is therefore forced to stay on its toes. Podcast | Business Day Spotlight - ...
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