Telkom future in cabinet hands

The Department of Communications (DoC) has confirmed that a shortlist of three strategic options for embattled firm Telkom has been presented to cabinet.

DoC spokesperson, Siya Qoza told BusinessTech that the matter is now in the hands of cabinet, after the communications department presented its options on Wednesday (19 September).

Qoza stressed that the department was unable to further elaborate on the statement it sent out last week, but assured that cabinet had received the necessary documents for Telkom.

Cabinet blocked a deal between KT Corp, a Korean telecommunications operator, and Telkom on 30 June 2012.

Government then tasked communications minister, Dina Pule to report back within three months with all the options available for Telkom, after the deal was canned.

On Friday (21 September), a spokesperson told media at a post-cabinet briefing that Cabinet did not discuss Telkom’s fate at the latest meeting on Wednesday.

In the statement, the DoC said that Pule and the Inter-Minesterial committee have worked “very hard” with government officials to distill the list of options down to three.

“The Minister and her colleagues at the Inter-Ministerial Committee have worked very hard with government officials and Telkom to trim the list of option to three. These three options will be presented at the next Cabinet meeting that is scheduled for next week.

“The Government views Telkom as a strategic asset in the rollout of ICT infrastructure in the country and is moving with speed to find a lasting solution that will make Telkom sustainable”.

Also on Friday, Telkom advised that its headline earnings per share from continuing operations for the six months ending September 2012 was expected to be at least 65% lower than the prior comparative period.

HEPS from continuing operations for the six months ended September 2011 stood at 191.7 cents, 35.5% lower than in 2010.

Telkom advised shareholders that basic earnings per share from continuing operations for the six months ending 30 September 2012 is expected to be at least 45% lower than in 2011.

“The lower earnings are mainly attributable to an increase in the provision for Competition Commission fines relating to transgressions of the company dating back approximately 10 years.”

“The operational performance for the period up to 31 August 2012 has been further characterised by flat revenue and operating cost that escalated just below inflation,” it said in a statement.

By close of play on the JSE on Friday, shares in Telkom declined 5.52% to R18.30, having surrendered more than 5% on Thursday.

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Telkom future in cabinet hands