ICASA names SNO stakeholder

Johannesburg, 31 Jul 2002

The Independent Communications Authority of SA (ICASA) yesterday recommended that government award a 19% shareholding in the upcoming second national operator (SNO) to Nexus Connexion, a consortium made up of unions and woman`s empowerment organisations.

The new fixed-line operator is expected to be operational early in 2003 and the minority share was set aside for black economic empowerment bidders.

However, Nexus must within 60 days show that it can raise R2 billion in capital if needed.

ICASA says Nexus was a clear winner among the seven consortia that bid for the 19%, with a thorough understanding of the issues involved, strong management and a commitment to empowerment.

It unanimously decided to recommend Nexus to Communications Minister Ivy Matsepe-Casaburri, who holds the final decision. The recommendation is conditional on the consortium within 60 days providing "adequate proof of its ability" to raise R1 billion in capital, and a further R1 billion if necessary.

"We are obviously quite excited," said consortium head Kennedy Memani after the announcement. "We are glad ICASA has acknowledged our view that the empowerment process needs to be elevated to a new level."

Memani says the first order of business is to study the conditions and to meet Transtel and Eskom`s Esi-Tel, the parastatals that are to hold a 30% stake in the SNO.

He expressed his confidence that the money to back the venture could be raised from the market, saying the SNO presented an attractive proposition.

Nexus is a custom vehicle put together for the bid, with ownership by various union investment companies and woman`s empowerment groups. The biggest shareholder owns about 10% of the consortium.

In a move to broaden the consortium`s empowerment footprint further, ICASA has laid down a second condition that at least 40% of the group`s shares must be sold to retail investors who are approved by ICASA.

The remaining 51% of the SNO is still up to bid for by experienced foreign operators, with a submission deadline of 30 August. ICASA is encouraging the six losing empowerment bidders to align themselves with such operators interested in bidding.

The previous licence issued by ICASA, to Cell C as the third cellular operator in SA, was long delayed after a losing bidder disputed the process by which Cell C was selected.