Telkom finally strikes a deal

ADSL South Africa (Broadband South Africa), 12 October 2008

ADSL South Africa (Broadband South Africa) has recently reported on Telkom’s perceived inability to strike a deal because of a lack of leadership and drive. It is therefore encouraging to know that Telkom has finally taken the first step to get rid of its 50% stake in Vodacom.

The marriage is coming to an end…

Telkom has announced that they are going to sell off a 15% stake in Vodacom to the UK-based Vodafone Group provided that certain conditions are met. The sell off is a sure sign that the Telkom Vodacom marriage is coming to an end. This is especially true if one considers that one condition stipulates that Telkom must unbundle its remaining stake in Vodacom to shareholders through a listing of Vodacom on the JSE (Johannesburg Stock Exchange). ADSL South Africa (Broadband South Africa) feels that this is not only a step forward for Vodacom and Telkom, but also a step forward for South Africa in terms of the liberalisation of the telecoms sector.

In addition, Telkom investors definitely have something to smile about if one considers that Vodafone will pay an estimated R22.5 billion for the additional stake in Vodacom. This will increase Vodafone’s stake in Vodacom to 65% and decrease Telkom’s stake in Vodacom to 35% initially, and 0% ultimately. Telkom investors will however have the choice, like the rest of us, to invest in Vodacom when it lists on the JSE. This means, if they prefer, they will be able to maintain a share in both Telkom and Vodacom.

<< Previous    [1]  2    Next >>