Thintana recently expressed their commitment towards the Telkom IPO despite
lingering disputes between ICASA and the country"s controversial Telecoms ACT, which
seems to have resulted in more questions and contentiousness than answers. However,
participants believe that as long as Thintana and Telkom show a united front to potential
investors, then
this year"s IPO is likely to be a success. Indeed, with the EMU telecom mkt cash
strapped and at maximum capacity, the fact that US telecom shares have delivered putrid
returns, SA could well be the window of opportunity. When one adds to this the belief by
some analysts that international fund managers are underweight with regards to SA shares
according to the MSCI emerging market index, then a stake in Telkom may be an alternative,
but nevertheless still a profitable alternative to JSE resource stocks, which are expected
to take off this year as global growth improves. However, the big worry that remains is
that of the country's extremely influential trade unions.That said, Private Enterprise Min
J. Radebe has previously said that nothing will stand in the way of govt's restructuring
plans.
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| If one examines the figures then one gets the impression that
labour is not going to accept these changes lying down. In fact last week the SA
Communications Union successfully applied for a Labour Court interdict to stop Telkom with
its planned retrenchment of 367 redundant employees. This comes on top of last year's 1093
voluntary severance/retirement packages. This was followed up with a further 2106
employees, which were either redeployed or retrenched. All in all this means that of the
61 237 Telkom workers that were employed in 1999, only 39 690 remain. While Telkom
maintains that downsizing is an essential part of its preparations for the arrival of a
second fixed line operating later this year, Unions believe that Telkom is only interested
in making Telkom appear more viable to those potential IPO investors. The other
determining factor, which has been quoted by govt repeatedly, is that of adequate market
conditions. Whatever the obstacles govt has to keep its privatisation plans on track given
its numerous benefits to the ZAR, consumer and country as a whole, not to mention the
credibility thereof. |
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