Telkom’s shares jump on talks of R750 million broadband contract
Telkom’s shares spiked more than 3% in afternoon trade on Friday following reports that it is close to an agreement with the South African government to start a R750 million broadband roll-out project.
The listed telecommunications firm, of which the government has a majority shareholding, gained R1.80 or 3.4%, to R54.80 on the JSE after Bloomberg said that the parties have held “extensive discussions about the contract”, citing two people linked to the deal.
Telkom shares rose as much as 4.7%, before a retreat during the morning session.
It said that Telkom has carried out site inspections and studied how to implement the plan in eight districts.
Telkom declined to comment on the project.
A government spokesperson told Fin24 that it hasn’t yet selected the “lead agent” for the deal.
“The lead agent in the roll out of broadband through the government policy known as South Africa Connect has not been appointed yet,” said Siya Qoza.
“The department is following due process to facilitate the roll-out of broadband for Phase 1, which aims to link government facilities in eight rural districts to fast, secure and reliable internet.”
President Jacob Zuma said during his State of the Nation Address on Thursday, that the government will fast track the implementation of the first phase of the roll-out to connect more than five thousand government facilities in eight district municipalities.
In his 2013 SONA, Zuma punted the fact that the government plans to achieve 100% broadband penetration in South Africa by 2020.
Telkom is 40% owned by the government, while state owned investment company, the Public Investment Corp, has 11.65% in the telco.
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