Telkom owns 50% of the cellular giant, but recently agreed to sell 15% for about R22.5-billion and unbundle the remaining 35% to its shareholders. “The negotiations and subsequent deal with Vodacom will set us free on a strategic and operational level and is central to our transformation process,” September told Business Times.

To this end, September said, at least half of the expected R22.5-billion — after paying taxes and net attributable debt — would be ploughed into the company’s “defend-and-grow strategy”. The remainder would go towards paying dividends.

September said Telkom shareholders could expect “a further opportunity to participate in a growing market” when Vodacom lists on May 18.

September said Telkom planned to invest primarily in its fixed-mobile strategy, data services and geographical expansion. It presently operates in 35 African countries.
“We have a significant presence in Africa already through MWeb Africa, Africa Online and Multi-Links,” September said. “In some areas we own infrastructure while in others we provide customer services by using the capacity of other operators. So we have a good launching pad to expand.”

Telkom’s biggest threat is MTN, which has a huge presence in Africa and the Middle East. “We want to be the preferred ICT service provider in Africa and we have a three-to five-year objective to achieve this,” September said, and pointed to the recent memorandum signed with US telecommunications giant AT&T.

While he refused to comment on the financial benefits, it is understood that the parastatal hopes to earn additional revenues of between 30-million and 40-million a year initially. “As part of this deal we will be utilising each other’s strengths in markets we are involved in via our international networks and services,” September said.