The minister of communications has finally approved the bid by Indian Telecoms group VSNL for an equity stake in the second national operator on Saturday — meaning nothing now lies in the way of licensing a rival to Telkom.
Minister of Communications Ivy Matsepe-Casaburri announced the decision on Saturday, saying a licence for the second national operator (SNO) should be issued ”at the earliest opportunity”.
”The stakeholders must (now) finalise the shareholder agreements and business plan as a matter of urgency,” she said in a statement.
VSNL is part of the TATA Group, which already has business interests in South Africa.
It was allocated the 26% equity stake in the second national operator after a long, drawn-out and strife-ridden bidding process that saw one shareholder, Nexus, threaten a judicial review.
Matsepe-Casaburri said on Saturday she was satisfied that VSNL had complied with all criteria required of the equity partner in the SNO by law.
She said it was ”an extremely important venture in the managed liberalisation process of the Telecommunication sector,” and she wished VSNL well.
The TATA-group is one of India’s business giants, with international interests in sectors ranging from communications to motor vehicles.
Analysts believe its long experience in telecommunications will benefit the future SNO.
The licensing of a second national operator has been awaited impatiently by the private sector, which is hoping that competition will result in cheaper rates.
Business Day reported research showing that the top 350 spenders in the country spent an average of R1,7-million a month on voice and data services over the fixed-line and cellular networks available.
Other shareholders in the SNO include Nexus (19%) and Eskom’s Esitel and Transnet’s Transtel (15% each).
In President Thabo Mbeki’s State of the Nation Address he issued a stern warning that the cost of calls in South Africa were unacceptably high.
”Bold steps have been taken further to liberalise the telecommunications industry. We believe that the unacceptable situation in which some of our fixed-line rates are 10 times those of developed countries will soon become a thing of the past,” said Mbeki.
”We also hope that the delays in setting up the second national operator (SNO), arising from legal processes which are beyond the government’s control, will be resolved in due course, and as soon as possible.” – Sapa