Johannesburg - Telecommunications group Telkom [JSE:TKG]
requires “skills and competency” to implement a turnaround plan, not foreign
investment, Communications Minister Dina Pule said in a report on Engineering
News on Monday.
Responding to parliamentary questions on cabinet’s decision
to halt a proposed deal between South Korean telecommunications group KT Corp
and Telkom earlier this year, Pule said that Telkom needed to find the “best
and most suitable” solution to its current challenges.
KT Corp intended to buy a 20% stake in Telkom for R2.6bn.
The South African government, Telkom’s top shareholder,
rejected KT Corp's R3.3bn offer for a 20% stake in the telecoms firm last
month, potentially scuppering the South Korean firm’s first foray into
Had the venture been implemented‚ it would have resulted in
KT acquiring a strategic equity shareholding of 20% in Telkom with the
companies entering into a five-year co-source management services agreement to
formalise the relationship and identify areas of mutual strategic and business
Pule said earlier that Telkom was a strategic asset in the
roll-out of South Africa’s 2020 broadband aims, but the group needed to “get
back to its critical centre”.
She noted that Telkom was also key in government’s efforts
to improve the skills of South Africa’s citizens.
The Department of Communications was undertaking assessments
of all possible options available to Telkom and would report back to Cabinet in
about two months.
It had been reported that the government plans to delist and
nationalise the embattled operator, but the reports have not yet been
On Friday, Telkom withdrew its cautionary announcement on
the JSE, signalling an official end to talks with KT Corp.
Telkom shares were down on Tuesday morning, trading at
R18.10 on the JSE.