February 3, 2005

By Gugulakhe Masango

Johannesburg - As the final drafting of the information and communications technology (ICT) empowerment charter approaches, all eyes are fixed on the sector's big players - Telkom, Vodacom, MTN, Cell C, Dimension Data and Datatec.

The final draft of the ICT empowerment charter is expected to be ready by next month and companies will feel the heat if they have not yet signed up empowerment partners.

The charter is likely to insist on ICT firms having a 30 percent direct empowerment shareholding by 2015.

Steve Minnaar, a telecommunications analyst at Old Mutual Asset Managers, said the charter would provide firmer guidelines for the telecommunications companies.

He said the finalisation of the charter would be positive for the telecoms players because they "will see what the requirements of the charter to be measured against".

The last draft charter proposed that a minimum of 30 percent of new investment be directed to black-owned small businesses.

Some telecoms firms have already done their empowerment deals or are working on them while others have already lost their black investors.

Max Koep, a telecoms analyst at Deutsche Securities, said it was going to be difficult for both Vodacom and MTN to reach the 30 percent direct black shareholding because of their huge size.

He said Telkom was on its way to getting a direct empowerment shareholder through the Elephant Consortium, which is buying a 15.1 percent stake.

Elephant is headed by former department of communications director-general Andile Ngcaba and includes top ANC functionary Smuts Ngonyama.

Mfanafuthi Sithebe, the telecoms co-ordinator at the Communications Workers'

Union, said the empowerment deals done by most of the ICT players did not go far enough.

"There is deferred ownership in most of the empowerment transactions in the sector," he said.

Some of the shares allocated for black investors in certain ICT companies were owned by institutions and banks, Sithebe said.

The charter is expected to guide the sector on issues of empowerment.

Market talk suggests that telecoms companies are in favour of getting their own empowerment charter rather than being grouped with information technology firms and broadcasters.

The draft charter specifies that black people should make up 40 percent of executive management by 2010 and 60 percent by 2015.

It also requires that eligible procurement spending be progressively allocated to black-owned and empowered enterprises by 2010, with at least 5 percent allocation by 2015.