A telecommunications investment of more than one billion rand could be placed in jeopardy if the second national operator was not up and running by the end of the year, says Eskom Enterprises CEO Enos Banda.
Banda, who was appointed CEO at the beginning of the year, told the Parliamentary public enterprises committee that he had been brought in to resolve the question as to whether Eskom Enterprises’ business model was sustainable.
He noted that while Eskom Enterprises — which is part of the Eskom group — has shown a gross profit of R556-million in 2002 up from R421-million the year before, net profit was just nine million rand which was down from R108-million the year before. Net operating income had dropped to R83-million from R130-million in this time.
He said the telecoms business of Eskom Enterprises had, in particular, faced pressures. He told Members of Parliament serving on the multi-party public enterprises committee on Wednesday that: “We looked at the economic value added and recognised that our telecommunications business based on the 2002 results consumed more cash than it was generating.”
Eskom Enterprises built the telecommunications links ‒- fibreoptic infrastructure — together with its transmissions network around the country which were suitable for use in the second national telephone operator, which is envisaged to compete with the current monopoly Telkom.
Together with Transtel, Eskom Enterprises has been guaranteed a 30% stake in the second operator.
Last month the Independent Communications Authority recommended that Communications Minister Ivy Matsepe-Casaburri reject both bids for the 51% stake in the second national operator. It argued that both bids, Two Consortium and CommuniTel, failed to meet the bid criteria and funding requirements.
In a statement released on Wednesday evening, Matsepe Casaburri confirmed she had received the recommendation from Icasa and her office said the minister “is currently applying her mind to this recommendation”.
Meanwhile Banda said in the next 12 to 18 months his business would be focusing on its core business, such as infrastructure development and energy operations.
He noted that the business had operated “a full plate and management and resources were stretched” noting that EE had been involved in transmission network design and engineering as far as Vietnam, Indian and China and had received invitations to participate in Mexico, Brazil and the United Kingdom. – I-Net Bridge