KT deal blocked, but Motlanthe praises Korea - TechCentral

KT deal blocked, but Motlanthe praises Korea

Kgalema Motlanthe

Less than a week after cabinet said it would not support a proposed deal to sell 20% of Telkom’s equity to Korea’s KT Corp, deputy president Kgalema Motlanthe has told delegates at the inaugural ICT Indaba in Cape Town that SA can learn from the Asian economic powerhouse.

“While we cannot downplay the role of primary or traditional industries, we must remain aware that the biggest commodity in the world today is knowledge, and the ability to generate, access, and distribute knowledge have become key determinants for a higher developmental trajectory for any nation,” Motlanthe told the week-long indaba, which has been organised by the department of communications.

“In this case we can learn a thing or two from the experience of South Korea, whose GDP per capita in 1960 was equal to that of Nigeria, Ghana and Cameroon,” the deputy president said. “However, within 30 years South Korea has managed to propel itself to among the eight richest economies in the world by setting up a knowledge-based economy.”

Motlanthe’s comments are ironic coming just six days after cabinet decided it would not support the Telkom/KT Corp deal, which the two companies spent the past nine months negotiating. Former communications minister Roy Padayachie had reportedly proposed the deal to Telkom.

Both Telkom and KT Corp have expressed disappointment at cabinet’s decision, with the former expressing surprise given that it was government that had first raised the idea of the deal. The transaction, if had happened, was to include a skills-sharing component.

KT Corp, like Telkom, was formerly wholly state owned. KT employs more than 31 000 people and in 2010 had revenues of nearly US$19bn.

In explaining cabinet’s decision not to support the deal, the department of communications said on Friday that Telkom formed a key component of its plan to take broadband to all South Africans.

“Telkom is a key and strategic asset in the roll-out of this telecoms infrastructure and in the effort to improve the skills of our citizens,” it said. “Government recognizes the need for Telkom to implement an urgent turnaround strategy and, to get the company back on its critical centre of delivering ICT services to all South Africans, new options will be considered by both Telkom and government in this regard.”

Cabinet has asked communications minister Dina Pule to report back to it about all the options that are available to Telkom in three months’ time.  — (c) 2012 NewsCentral Media

  • Image: World Economic Forum

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