Takaendesa said the reason governments don’t play a big role in telecoms is they have increased their regulatory capacity. “Instead of owning you can just regulate.”
The Independent Communications Authority of South Africa (Icasa) was established in July 2000 and Telkom was created in 1991.
“It was important back then that they owned telcos because in most cases there was just one operator in the country and there was a monopoly. So, if the government does not own a monopoly, a monopoly is going to charge the consumer to the end of the world,” he said.
He noted that because the telecommunication industry has multiple players such as Vodacom, MTN, Cell C and Rain, there is enough competition to drive prices down and the government does not need to insert itself to ensure such anymore.
Simon Brown, an independent equity analyst, said it is not important for the state to have a stake in the telecommunications sector. “They have effectively been a minority shareholder since they stopped fiddling and the sector does perfectly well without them.”