Cape Town, 17 Jul 2006
The sale of Eskom`s portion of its full service network will be finalised before year-end, so the second national operator (SNO) will be able to begin offering services in the first quarter of next year, sources say.
Last week, state-owned electricity utility Eskom said in its annual results it was divesting from its telecommunications assets, because of the non-performance of the sector, and would focus on its core business.
"Eskom has already sold its shares in other joint ventures, notably in Nigeria and Lesotho, which were relatively small holdings. It has been expected that it would sell its portion of the full service network it shared with Transtel," says Brian Neilson, a director at research firm BMI-TechKnowledge.
Earlier this month, state-owned transport group Transtel said it had sold its share of the network for R256 million to the SNO. Eskom`s share is worth about R748 million. The network`s prime assets are the extensive fibre optic cables that have been laid around the country.
A source within the SNO says: "It is a safe bet the Eskom sale will be wrapped up by year-end. Negotiations are at an advanced stage."
The sale of the full service network will not affect the 15% holding in the SNO that Eskom and Transtel each hold. In terms of an agreement signed between government and the SNO, during the licensing phase, the state could allow the new telecommunications utility to either buy the Eskom and Transtel stakes completely or it could opt to lease these.
"It seems the SNO wants to own the network and so have a permanent asset," the SNO source says.
Previously, SNO MD Ajay Panday said his company would invest about R8 billion in the South African telecommunications market.
"It has become important for the SNO to tidy-up these things, because everyone is waiting for it to become operational," Neilson says.
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