Telecommunications and Postal Services Minister Siyabonga Cwele. Picture: TREVOR SAMSON
Telecommunications and Postal Services Minister Siyabonga Cwele. Picture: TREVOR SAMSON

The government is considering selling a portion of its shares in Telkom to a state-owned investment entity in a deal that will ensure that it retains control of the fixed-line group.

The government owns 39% in Telkom and is weighing options to dispose of some of its shares to raise money for the ailing state-owned airline, South African Airways.

Speaking on the sidelines of Telkom’s Southern Africa Telecommunications Networks and Applications conference in France last week, Telecommunications and Postal Services Minister Siyabonga Cwele said that as Telkom was a strategic asset, the government was considering selling it to another state-owned entity (SOE).

"We don’t want a total loss of the business … Telkom is a high-value entity," he said.

"We also want to be able to buy back the shares in future," he said. The reason for Telkom being targeted was not "because we think it is not strategic. It is easy to dispose [of]."

"In principle, there is no objection for any asset to be disposed of if it reduces debt," Cwele said.

He reiterated that Telkom was key to the government’s objectives for universal access to broadband.

Telkom has SA’s biggest telecommunications network infrastructure that also covers remote areas.

Meanwhile, the merger of the state-owned entities Broadband Infraco and broadcasting signal distributor Sentech is proceeding well, with plans to complete it early in 2018.

"Technical work [on the merger] is now being done and [we] should be able to be presented with the viable solution soon," Cwele said.

The merger was aimed at extracting more value from both Sentech and Broadband Infraco.

It was part of a continuing review of state-owned entities aimed at disposing of noncore and nonperforming businesses or merging them with other entities that operate in the same space or provide similar and complementary services.

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