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A new era in SA telecoms?

Nov 02 2010 09:25 Simon Dingle

Company Data

Telkom [JSE : TKG]

Last traded R23.81
Change R0.03
% Change 0.13%
Cumulative volume 2.81m
Market cap R12.40bn

Last Updated: 25/05/2012 at 17:43. Prices are delayed by 15 minutes. Source: McGregor BFA

 

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RETIRED general Siphiwe Nyanda has been plucked from his position as minister of communications amidst backpedalling on key issues such as South Africa's digital terrestrial television migration, strong-arming a supposedly independent regulator, suspicious spending on luxury cars and other dodgy business accusations.

Good riddance seems to be the common sentiment. But where does this leave the communications ministry in South Africa?

The department of communications has been a disaster pretty much since 1994. The now-deceased Ivy Matsepe-Casaburri was a virtual wrecking ball in the industry and was at the helm of some of the worst decisions ever made in global telecoms.

The department under her guidance stifled the local industry to the extent that it is now at least a decade behind where it should be, even if recent progress has been rapid.

But while Matsepe-Casaburri was stuffing things up, her deputy - whenever he was afforded the opportunity to present himself - displayed a grasp of key issues concerning the local industry and seemed at least two orders of magnitude more clued up than his boss. Radhakrishna Lutchmana - or Roy - Padayachie was the man most industry stakeholders I spoke to hoped would take over the ministry after Casaburri stepped down.

Instead, we got the only person more clueless than Matsepe-Casaburri - Manto Tshabalala-Msimang, who served temporarily in the position until Jacob Zuma assigned his initial cabinet. Padayachie was out of the department altogether, replaced by Dinah Pule as Nyanda's deputy.

But now the general is out and Padayachie is in his rightful place. And he has his work cut out for him.

By all accounts, the department is in a shambles and the new minister wasted no time in stating his intentions.

On Monday morning Padayachie told technology news website TechCentral that he hoped to foster a new era of partnership between government and the private sector - although we don't know exactly what that means.

He also said he intends to ensure that technology is used to its maximum in assisting economic development.

But perhaps most importantly - he was making these statements before he had even been sworn in. Clearly, communications has been on Padayachie's mind even while he was not involved in the department.

And so we finally have someone who understands the industry, seems to have its best interests at heart and wants to work with big business. Of course, only time will tell if he can deliver.

Padayachie has a promising track record, however. He was instrumental in initial attempts at reducing telecoms prices for consumers in SA but was limited in his ability to execute, being a deputy minister.

I can't find a single analyst who is against Padayachie's appointment. Most are happy to see Nyanda go, even if they aren't completely sold on his successor.

I will personally be watching Padayachie's interactions with the Independent Communications Authority of South Africa (Icasa) - the industry regulator in charge of vital policy-making and oversight - with much interest.

Icasa has been less than independent until now, the most recent case in point being the very suspicious announcements surrounding interconnect rates made last week which clearly favour Telkom Mobile. The government still owns a 40% stake in the Telkom [JSE:TKG] group.

Even if the two have nothing to do with each other, it's hard to believe this while the state continues to own a stake in the country's incumbent network.

Padayachie has made it clear that he believes Icasa's independence must be maintained at all costs. However, he must somehow make sure that things move ahead without direct meddling - easier said than done. And this is just one area that urgently needs his attention.

Welcome back to the ministry, Mr Padayachie.

We need someone like you to shake things up - and I personally look forward to covering your progress.

- Fin24
 

 
 
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