Shares in Telkom lifted to their highest level since 2011 in morning trade on the JSE on Wednesday, after a court ruling on mobile interconnection rates favoured the group in the short term.<\/p>\n
Telkom advanced 4.24% or R1.46 to R35.89 on the JSE, a figure it last reached towards the end of 2011, and up from its 52-week worst level of R11.34, reached in May 2013.<\/p>\n
Shares in the group show a one-year return of 142%, giving it a market cap of just under R18 billion.<\/p>\n
The South Gauteng High Court on Monday (31 March) ruled that new call termination regulations issued by the\u00a0Independent Communications Authority of South Africa (Icasa) are \u201cunlawful and invalid\u201d.<\/p>\n
However, the declaration of invalidity has been suspended for six months, meaning that that the new call termination rates kicked in on Tuesday, 1 April 2014.<\/p>\n
Icasa has been given six months to review the regulations.<\/p>\n
Among other things, the current regulations cut mobile termination rates (MTRs) to 20 cents per minute, while allowing asymmetry of up to 44 cents per minute.<\/p>\n
Under the ruling, for the next six months Cell C and Telkom Mobile will be allowed to charge Vodacom and MTN significantly more to place to calls to their networks than Vodacom and MTN can charge them.<\/p>\n
In a note to staff on Tuesday, Telkom CEO Sipho Maseko said that successes achieved over the past year \u2013 under extremely challenging circumstances \u2013 have reinforced that \u201cTelkom is a remarkable place, with remarkable people\u201d.<\/p>\n
In the letter Maseko reflected on his first year at the helm of Telkom, saying that he came to the company recognising that it has \u201cenormous challenges\u201d.<\/p>\n
He noted that, while Telkom has had a \u201cfew good wins\u201d in the past year, the company has to \u201cface up to a hard truth\u201d as it turns to the next financial year.<\/p>\n
\u201cWe still need to do a lot more,\u201d Maseko wrote. \u201cWe must recognise that we have a challenging year ahead of us, one that will require even more effort from all of us.\u201d<\/p>\n
Maseko said that, despite these challenges, efforts to turn Telkom around have already started to bear fruit.<\/p>\n
In March, Telkom advised that it expects headline earnings per share for the year ending March 2014 to be at least 20% higher than in 2013.<\/p>\n
It also signed an agreement with MTN which will see MTN take over financial and operational responsibility for the roll-out and operation of Telkom\u2019s radio access network (RAN).<\/p>\n
The agreement will enable each party to be able to roam on either party\u2019s network.<\/p>\n
Telkom expects to publish its annual results on about 13 June 2014.<\/p>\n
MTN, Vodacom call termination case: court rules<\/strong><\/a><\/p>\n