Ferial Haffajee
COMMUNICATIONS Minister Jay Naidoo is definitely going to sell another 10% of Telkom. He just hasn’t worked out how he’s going to do it yet.
Last week’s R5,58-billion deal to sell a third of Telkom to American and Malaysian partners was signed without an empowerment component.
Naidoo’s next task will be to fine-tune the plan to sell a slice of Telkom to workers, black businesses and other disadvantaged groups.
“We’ve done no detailed work on it yet,” says Naidoo’s representative Connie Molusi, adding, “We put it aside to concentrate on the other deal.” But the ministry wants to push through the next sale by the end of July.
The shares are likely to be placed in a national empowerment fund that the government will soon establish. This fund will collect contributions from all privatisation deals.
The National Framework Agreement, forged last year between government and labour, provides that all state sell-offs will have some empowerment quotient. But the agreement is thin on the detail of how this should be done – as are the trade unions that operate at Telkom.
The Communications Workers Union, affiliated to the Congress of South African Trade Unions, says it wants to have speedy talks with the government.
The union’s general secretary Seleboho Kiti says a trust should be established to administer the shares. His union is concerned that a general empowerment fund is too vague: it will likely push for a specific Telkom sub-fund.
The union says proceeds from the shares must be used to encourage workers to stay in the industry by offering them a career path in telecommunications.
He suggests that workers be trained to run phone shops or start up subcontracting businesses to win some of the contracts to connect the 1,8-million lines Telkom has committed itself to providing in the next five years.
Jenny Cargill of the consultancy BusinessMap says some of the next tranche of Telkom shares are likely to be placed in the empowerment fund. “A general fund pools the risk for people buying into it,” she says.
The fund could operate like a unit trust. It will also be similar to retail vehicles – the new empowerment initiatives started by big companies like Johnnic and M-Net – which give ordinary black shareholders a chance to buy shares by putting down a deposit and paying off the balance.
Unions and unaffiliated employees could be given shares by way of employee share option participation schemes. The majority white South African Telecommunications Association says all employees should be given the same share options, with no special shares for trade unions.