CUASA: Only changes to shareholding can save the SNO

JOHANNESBURG (04/02/2004) - Had either Two Consortium or CommuniTel won the 51 percent share of the SNO, it is likely that Telkom's competitor would already be offering services instead of the current mess and mud slinging by some shareholders in the SNO, according to the Communications Users Association of South Africa (CUASA) spokesman, Ray Webber.

"Two Consortium and CommuniTel were both bidding for the 51 percent share of the SNO. Had either received this, they would have had the controlling shareholding and the SNO would probably be offering services to users by now. However, South Africa's mess of an SNO process has resulted in a wishy-washy outcome where each was awarded 13 percent and the 25 percent balance, warehoused," says Webber.

"Two Consortium and CommuniTel, combined, currently hold the largest portion of the shareholding (26 percent), although it is unfortunately not the majority of the 75 percent allocated thus far. Nevertheless, a recent article in ITWeb reads that: "Nexus Connexion chairman Kennedy Memani has blasted the 13 percent shareholders in the second national operator (SNO), claiming they are seeking to control the entity, despite having such a small shareholding." From an independent perspective, Memani's assertions are strange indeed -- because at 26 percent combined, Two Consortium and CommuniTel control a much larger stake than Nexus' 19 percent.

"CUASA does not believe that it was originally intended that Nexus should become the largest individual shareholder in the SNO. Therefore, Nexus should exercise some restraint before claiming to be the largest single shareholding. Furthermore, some conspiracy theorists believe the resulting Nexus stake was part of an overall plan to ensure dominance in the SNO anyway," he says.

"The sad part of all this is that while the SNO mess continues to fester it is South African telecommunication users who are the ultimate losers. Telkom simply laughs all the way to the bank.

"We urgently need some real competition in this market, and the SNO fiasco is delaying the faint glimmer of light at the end of the tunnel. It appears that the only way to save the day will be for the Minister to decide how to allocate the remaining 25 percent, and this needs to be done urgently," Webber concludes.

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