Jubie Matlou
From simple beginnings as a telephone services division within the South African Post Office, Telkom’s 10 years of operation as a public utility in the information and communication technology industry is comparable to a growing lion cub that has to fend for itself.
Telkom was corporatised on October 1 1991 and in 10 years revenue has increased by 15% to R32-billion. From day one the corporation was required to pay company tax and dividends to its shareholders.
For Anthony Lewis, Telkom’s chief financial officer, this period marked the inchoate stages in the corporation’s quest to assert itself by maintaining its network.
The second phase spans the time from 1994 to 1997 and was punctuated by the infusion of capital when the government sold 30% of its shares to Thintana to come on board as a strategic equity partner. The $1,2-billion financial injection was used for network expansion.
The third phase was the licensing period, when the law imposed obligations on the company to roll out telephone services to rural areas.
The fourth phase in Telkom’s development is its listing on the Johannesburg Securities Exchange, with the government selling a portion of its shares and the entry of a new wired telephony service provider.
Lewis maintains that Telkom is ready for competition in the wired telephony market and to welcome new shareholders in the initial public offering. However, the government still has to declare the percentage of its shares that it seeks to dispose of and the timing of the listing of Telkom on the securities exchange. Telkom has done everything to shore up the value of its shares once the listing process gets under way.
“The value of shares is an intricate process during the public listing of a company,” says Lewis. “We have done many things to make sure that those values once determined will reflect on the worth of the corporation. We have expanded and upgraded our network, invested in human resources, expanded our business activities. All these things create value for Telkom.”
To use Telkom’s own euphemism, this fourth phase in the corporation’s history is the “end of the beginning”.