While reporting last week on renewed steps towards licensing a second nat-ional telephone operator (SNO) I became curious about how our existing national operator, Telkom, is coping with life as a listed company.
My curiosity was heightened by a tip-off that Telkom now makes a conscious and deliberate effort to see and project itself as a listed company, and not a parastatal.
The market, however, remains divided over whether the utility has revamped its ethos. An executive who recently spoke to I-Net Bridge appears persuaded, arguing that “the [SNO] will not be able to compete against Telkom”. He believes the second operator will be bogged down by the “parastatal mentality” imported by Transtel and Esitel, respectively the subsidiaries of Transnet and Eskom, who will jointly own 30% of the venture.
In particular, the executive was impressed by the way Telkom defines its friends and foes. Whereas Telkom used to regard Internet service providers as competition, they now see them as partners.
Personally, I’m not convinced. My experience is that Eskom is more “corporate” in its culture and more efficient. Moreover, if Telkom really objects to being branded a parastatal, why did it not raise the objection six years ago, when the (private) Thintana consortium bought a slice of it? It is difficult to imagine how, between listing on March 4 and now, a new cultural outlook can have permeated all levels, from the board to the telephone technician who drops in on his mistress while on his way to fix a faulty line.
Whether there has been a culture change at Telkom will be judged by its compliance with listing requirements on matters such as the reporting of financial results within three months of the end of its financial year and general market communication. It can start by putting its share price on its website and answering the phone promptly.
Another matter that will have to be answered soon concerns the economic merits of listing. From its listing price of R28, Telkom opened on Thursday at R33.
Last year, analyst Franca di Silvestro of HSBC Securities asked why, having already committed itself to capital expenditure, the government felt an urgency to list. She argued for a non-time-bound commitment to going public that would wait for the market to improve, list and then pay off debt or do whatever with the money raised.
A more important question, raised as the listing approached, was whether buying Telkom shares to gain exposure to Vodacom made sense at all. One can achieve the same goal by buying into Venfin, which owns 13,5% of Vodacom.
Analysts are forbidden by the regulations of the Securities Exchange Commission in the United States to release their research, but one told me in a highly suggestive way “I know the answer”. Now they can tell us all.