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"Because of Telkom, not one of our South African clients is globally competitive," complains Mr Ord.
Final negotiations for the sale of 30% of Telkom, the state-owned telecommunications monopoly, are taking place with Telekom Malaysia and SBC Communications, an American company.
The government has officially deregulated its telecommunications markets and unraveled the two companies' cross-shareholdings, and it has sold portions of Telkom.
The government is reluctant to lose control of Telkom, partly because it is a useful way of delivering contracts to black business.Helping the cluster of small IT firms to grow will be difficult.
Telkom Malaysia and SBC Communications, which together own 30percentt of Telkom South Africa, are in talks with the government, which owns the remaining 70percentt, over which will sell shares and how much of the company will go public.
Although there are hundreds of service providers in the country, the majority of people are clients of Telkom, the state-linked giant, and a handful of other, private operators.
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As for European firms, only Millicom of Luxembourg and Vodacom, a joint-venture between Vodafone of Britain and Telkom of South Africa, have much of a presence.
Anticipating a relaxation of restrictions on international gateway access, a handful of companies including Cable and Wireless of Britain, Telkom South Africa and France Télécom are exploring ways to increase bandwidth in the Middle East.
The idea for the "second national operator" (SNO)—its new brand name had not been announced as The Economist went to press dates back to 2001, when the government proposed the establishment of a rival to Telkom, the monopoly fixed-line operator.
When South Africa announced this week that the initial public offering of Telkom South Africa, by far the largest telecommunications company south of the Sahara, would be delayed yet again, the news threw cold water on the whole privatization effort here -- not to mention the national budget.
The communications minister, Ivy Matsepe-Casaburri, promised to license at least one rival to Telkom, the current monopoly provider, and to set aside up to 30% of each big licence for black South Africans.The conflict between business-as-usual and compensation for blacks would be easier to resolve if white businessmen trusted South Africa's black-dominated government, and vice versa.
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