The gloves are off. Eskom chairman Mteto Nyati says Business Leadership South Africa and Business Unity South Africa – long the loudest critics of political meddling in state-owned enterprises – are themselves guilty of advocating “political intervention” by pressing for the transfer of the transmission grid to an independent operator. BLSA CEO Busisiwe Mavuso has hit back hard, writing that “Nyati is fundamentally mistaken both on the motives for our advocacy and what good governance demands of the Eskom board”.

Strip away the personalities and the wounded pride, and the question underneath this row is simple: should the company that generates most of South Africa’s electricity also own the network on which its competitors depend?

We have run this experiment before. It was called Telkom, and it cost the country a decade.

For years, Telkom was both a competitor in the retail telecommunications market and the owner of the only last-mile network in the country. Anyone who wanted to sell broadband or voice services had to buy access from the very company they were competing against.

The results are a matter of public record. Telkom was found guilty of abusing its market power between 1999 and 2004, for which it paid a R449-million fine, and it settled a second case – covering conduct between 2005 and 2007 – with a R200-million penalty and a commitment to functionally separate its wholesale and retail divisions, so that its wholesale arm would treat its own retail business as, in the Competition Commission’s words, “just another customer”.

The damage was done

The regulators tried to referee. Government promised local-loop unbundling – the opening of Telkom’s copper network to competitors – and gave the company until November 2011 to comply. When that month arrived, all communications regulator Icasa could offer was a framework proposing consultations, working groups and a “true bit-stream product” by November 2012. None of it materialised. Local-loop unbundling was never implemented in South Africa – not in 2011, not ever.

In 2015, the company spun off its wholesale arm as Openserve. What is striking, reading back, is how then-CEO Sipho Maseko described the logic: “Through this separation, and the creation of Openserve, we remove critical stumbling blocks on our path to success.” And, in a line the Eskom board might usefully frame and hang in its boardroom: “Shared accountability is tantamount to no accountability.”

In other words, the incumbent itself ultimately concluded that being both player and referee was bad for the incumbent. But by then the damage was done. Telkom’s rivals, unable to get into the copper, had spent years building around it – Vumatel, Octotel and Frogfoot wired up the suburbs with fibre while Telkom guarded a network whose value was evaporating underneath it. Consumers paid for that lost decade in high prices and sluggish speeds. Telkom paid for it in fines, litigation and shrinking relevance.

Here is what makes the electricity version of this story more dangerous, not less. In telecoms, the market could eventually route around the gatekeeper. Building a competing last-mile fibre network is expensive but possible, and it happened. Nobody is going to build a competing transmission grid.

There will be no plucky start-up stringing rival 400kV lines across the Karoo. Independent power producers that cannot get grid access do not have a workaround; they simply do not connect, and their projects die in the queue. That is precisely the constraint throttling the renewables investment South Africa desperately needs, and why a competitive electricity market is the real prize of the reform programme.

Mavuso’s argument is structural, not personal: an entity that is both a generator and the gatekeeper of the grid on which rival generators depend has a conflict of interest baked into its design. No board charter, however well drafted, resolves it.

To be fair to Nyati, his concerns are not frivolous. “These are the same bodies that insist on corporate governance and board independence. Where, then, is the role of the SOE board? What exactly do they believe in?” he asked in his post on X. It is a fair jab, and his insistence that Eskom must build renewables or face extinction shows a chairman who understands the utility cannot survive unchanged.

Eskom CEO Dan Marokane’s warning that immediate legal separation could trigger cross-default clauses in lender agreements also deserves serious engagement, even if, as Mavuso notes, bondholders the world over have lived through such restructurings before.

But these are sequencing problems, and sequencing problems have solutions. They are not arguments for abandoning separation, and – crucially – that decision has already been taken.

Written into law

President Cyril Ramaphosa publicly overruled the keep-it-in-the-family plan in February, saying the independent transmission system operator “will have ownership and control of transmission assets and be responsible for operating the electricity market”.

Business argues the requirement is now written into law, in section 34A of the Electricity Regulation Amendment Act. And the financing logic is hard to argue with: an operator that owns nothing has no balance sheet, and without a balance sheet it cannot raise the R440-billion needed to build more than 14 000km of new lines over the next decade.

The lesson from Telkom is not that unbundling is easy. It is that delaying it is the most expensive option of all – for the country, and ultimately for the incumbent itself. Telkom fought separation for a decade, watched the value of the network it was protecting evaporate, and then embraced separation as part of its own turnaround plan.

Eskom’s board should stop re-litigating settled policy and start negotiating the terms of a transfer that protects lenders, workers and the grid itself. That is where its governance duty now lies. Because if two decades of telecoms history taught South Africa anything, it is this: you cannot be the grid and the gatekeeper. — (c) 2026 NewsCentral Media