SACP calls on the government to strengthen its position in Telkom for a developmental purpose, as opposed to further privatisation

29 June 2023

The South African Communist Party calls on the government to further consolidate its position in Telkom, as opposed to further dilution or privatisation, which the Party will mobilise to oppose vehemently.

Similarly, public service workers need to unite and intervene strategically to ensure that their Government Employees Pension Fund managed by the Public Investment Corporation (PIC) tightens its grip on their collective stake in Telkom.

The SACP will approach the progressive trade union movement, among others, as a matter of priority, to discuss and develop a joint programme of action to realise this way forward.

The government equity stake in Telkom is 40,51 per cent, while that of the PIC is 13,39 per cent. This means that the government and the PIC, which is a public entity, control a combined stake of 53,9 per cent, which is decisive. By further consolidating its stake, the government can increase public ownership in Telkom, and work together with the PIC in pursuit of a developmental mandate.

The government must build and strengthen thriving state participation in the information and communication technology network industry as part of the wider imperative to build a more diversified and growing public economy on behalf of the people as a whole. At present, the industry is dominated by the duopoly of Vodacom and MTN.

At present, the majority of the people, overwhelmingly African in particular and black people in general, are the workers and poor. Women make up the majority of this majority. It will not make sense for the government to lament the persistent high levels of racialised class inequality and poverty and in contradiction pursue policies that in practice further enrich a tiny minority of individuals, leaving the majority behind.

The information and communication technology network industry is strategically important in the unfolding digital technological advances, including the increasingly crucial, diversifying and growing digital economy. This process of industrial transformation is heading towards a future of the most profound and more capable quantum technology industry, which is too important to be left entirely in the hands of profit-driven, private capital accumulation interests leaving the majority of the people behind in ownership and related income terms.

The suitors who have compiled and approached Telkom with unsolicited equity acquisition bids, including its former CEO Sipho Maseko’s Afrifund group, know that it is a productive asset with highly valuable content. Their aim is none other than making far more than they would advance in equity acquisition capital if the deal they want were to be allowed to go ahead. For there is nothing in principle prohibiting the government in particular as the largest shareholder to further consolidate its position and reposition Telkom to make more on behalf of the people as a whole. The government, together with the PIC, can help South Africa to roll back uneven development by bridging the digital divide through a rollout of digital connectivity infrastructure across the country.  

Issued by Alex Mohubetswane Mashilo, National Spokesperson, SACP, 29 June 2023