The bid of Optis Telecommunications consortium, one of only two bidders for a 51% stake in the upcoming second national telephone operator (SNO), has revealed some intriguing detail about the group but done little to change its image as an also-ran in relation to competitor Goldleaf.
The bids of both consortiums were made public yesterday.
Warren Friedland, 18, who is the largest shareholder in the group, owns 30% of Optis. His father Alan and 21-year-old sister Monique own 25% and 18% respectively, to bring the total family holding to 73%.
"I held the shares in the family," says Alan Friedland, the reluctant spokesman for Optis. "We are in negotiations with overseas equity partners who want shares and it is easier to hold them in the family to do those deals."
The next largest shareholder, at 10%, is Lotsons, a firm owned by Seth Phalatse, the former chairman of the Strategic Fuel Fund who was accused of accepting a bribe.
However, Optis did not disclose the shareholders of its constituent companies as required and Friedland would not expand on either Lotsons or Orient China Investments, which holds 15% with Shanghai Telecom.
Another interesting but former player is the controversial Trevor Tutu, who is often described as the wayward son of archbishop Desmond Tutu. He attempted to submit his own bid for the SNO stake by way of a consortium named "Not Just Cheap Talk". The bid was rejected out of hand because the consortium failed to pay the required R250 000 application fee after also missing the submission deadline.
Tutu is listed as a director of Empowerment Billboards Pty Ltd, which changed its name to Optis to become a bid vehicle last month.
Friedland says Tutu resigned as director of the company "long before" the bid was submitted. "It is just coincidence, it has no bearing whatsoever on the bid."
The bid documents do not show Tutu`s resignation, but that is not the only respect in which it is lacking. At one point the consortium appears to confuse SA with Mozambique, stating that "following 14 years of civil war which ended with the Rome Peace Agreement and national elections in 1992 and 1994 respectively, SA has established a sound and secure democratic government..."
Big plans
Nonetheless the consortium has big plans should it win the bid to control the SNO. Its business plan includes "aggressive marketing to create a large subscriber base, which in turn, through economies of scale, will permit us to lower tariffs". It also plans a "rapid and massive early roll-out" of infrastructure. That is to be funded from a total kitty of $808 million, or more than R8 billion.
Optis also says it will establish roaming agreements with all three mobile operators as "this will essentially be critical for our mobile subscribers" and will also have international roaming in place. However, the SNO is to be established as a fixed-line operator, allowed to use cellular technology only to provide fixed services.
Although the consortium has not provided a full business plan, it expects the SNO to see net national voice service revenue of R296 million by 2004, growing to more than R2.7 billion by 2007.
The Independent Communications Authority of SA (ICASA) is expected to evaluate the Optis and Goldleaf bids and announce a winner by early next year.
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