Government to make Telkom decision at end May

(Image: GCIS)

"We have been told by our transactional advisor that they are ready with a report for us and we will need a few weeks in which to make up our minds and then get Cabinet's approval. A decision will be made by the end of May," she said.

Telkom is the country's major fixed line operator and plays a dominant role in the entire telecommunications market space but its poor performance has caused its share price to decline from more than R128 per share to around R23.50 per share currently.

US telecommunications company AT&T (formerly SBC) sold its stake in Telkom in 2005.

The SA government is Telkom's largest shareowner with a stake of 39.5%.

During her budget vote speech Pule indirectly criticised Telkom when she said that it was unacceptable that only 10% of the country's population had access to a fixed line service - a percentage that hadn't changed since 1999.

Labour movement Cosatu, an ally of the ruling ANC, has been vociferously opposed to government selling its stake in Telkom and has proposed that the company be renationalised completely.

Telkom was partially privatised in 2003 with a primary listing on the Johannesburg Stock Exchange and an indirect listing on the New York Stock Exchange through American Depository Receipts. The latter listing has been terminated.

Telkom has been the main target of the telecommunications regulator Icasa and industry ire for keeping SA' broadband costs higher than its peers.

During the press conference Pule referred to the fact that the country's cellular and broadband costs were high and that she wanted to work with industry to reduce them.