If MTN’s acquisition of Telkom is successful then the government will effectively not have a presence in the telecommunications industry.
Takaendesa said the reason governments don’t play a big role in telecoms is they have increased their regulatory capacity. “Instead of owning you can just regulate.” He noted that because the telecommunication industry has multiple players such as Vodacom, MTN, Cell C and Rain, there is enough competition to drive prices down and the government does not need to insert itself to ensure such anymore.
Takaendesa said the privatisation argument is not relevant because Telkom is “not like other state-owned entities” because it is already largely privatised. Over the years, Telkom has cut its staff numbers through several voluntary retrenchment cycles as it tried to cut back on costs. “We don’t want to end up with a situation like Iscor. The government needs to use shares as security because if we are not careful we will end up selling everything and saying we don’t have money,” he said.