Media Comment - 19 March 2002

M-Cell government stake for sale

The government has injected hope into the market that Telkom may be listed, by issuing an invitation for local and international companies to bid for its 24.5% stake in M-Cell. Analysts said that the call for bids indicated government believed it was an opportune time, in terms of the global telecommunications market conditions to sell its stake. Under its January agreement with Ice Finance, Transnet has 18 months before it must find an equity partner for M-Cell, but government has decided to drive the deal through now rather than wait. The move could be a signal that government is determined to finalise Telkom's initial public offering, believing that the timing is almost right. It will also pave the way for the introduction of a second national phone operator. The sale of the stake is seen as necessary to avoid conflict of interest ahead of the bidding process for the second operator.