Times Of Swaziland: HUGE APPETITE FOR EPTC’S 41% MTN SHARES - MINISTER

HUGE APPETITE FOR EPTC’S 41% MTN SHARES - MINISTER
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BY WELCOME DLAMINI on 15/03/2020 00:31:00


MBABANE –  If a Cabinet minister who is responsible for two different
portfolios confirms the venue for an interview to be ‘my office’, which
conundrum suddenly faces you?
Obviously, it has to be: which office is he referring to?
Well, for me to answer this question I first thought of the portfolio which the
interview would focus on; and it was on Information Communication and Technology
(ICT).
So, I asked myself: does this mean the minister was referring to the office of
the Minister of ICT when he said ‘my office’?
With the interview barely 30 minutes away, I had to come up with an answer, and
quickly. It suddenly hit me; the minister cannot say ‘my office’ in
reference to the Minister of ICT’s office because he is only the acting
minister in that portfolio.
His substantive position is Minister of Commerce, Industry and Trade and his
name is Senator Manqoba Khumalo, the former General Manager at the multinational
Coca Cola Company where he was based in Dublin, Ireland.
Communications
Having deduced that ‘my office’ was the Commerce Industry and Trade office
at the inter-ministerial building, I quickly called a taxi to fetch me from the
office.
It’s Friday and the department car is out on another assignment hence the
taxi; other departments’ vehicles are also unavailable.
With the interview scheduled for 3pm, I am running late because it’s 2:58pm
when the taxi eventually picks me up. But because the inter-ministerial building
is not far from the Times offices, I am at the minister’s office by 3:06pm.
To my relief, his Personal Assistant Patience Ramanamane, whom I find with the
Ministry’s Communications Officer Thabile Mdluli, tells me that he is still at
his ‘second wife’ – the Ministry of ICT, which is in the adjacent building
just a stone’s throw away.
So I am offered the comfortable sofa to relax as I wait. It is not long before
the minister emerges from his office, having come in through another entrance,
carrying a piece of what I deduced to be Kentucky Fried Chicken. “Good
afternoon Mr. Dlamini, I am sorry I am still having my lunch and I will be with
you shortly. These people (pointing at Thabile and Patience) work my socks off;
they don’t give me time to rest,” he says.
And it is indeed not long before he is done with his KFC and invites me to his
office.
challenge
He offers me a seat in his portable round table and Thabile has also been
invited to sit in throughout the interview.
“She’s here to call me to order should I digress,” says the minister.
After manoeuvring the chitchat, we then get to the nitty-gritty of the
interview, starting with the challenges he has encountered since he began acting
in the position of Her Royal Highness Inkhosatana Sikhanyiso, the incumbent
Minister of ICT.
“The first challenge was workload because the Ministry of Commerce is in
itself a very demanding job, like all ministries. You feel you don’t have
enough time in the day to do what you’re supposed to do. If you go to a
ministry as hectic as ICT, trying to find a balance was the number one
challenge,” Khumalo says.
Secondly, he touches on the backlog of issues that he says needed to be
addressed, particularly initiatives that Her Royal Highness had started and were
already in motion and needed to be brought to fruition but, for one reason or
another, were lagging behind.
He tells me that these issues include the probe at the country’s two
State-owned broadcasting stations – the Eswatini Television Authority (ETVA)
and the Eswatini Broadcasting and Information Services; the obsolete
infrastructure at ETVA; growing the television station and ensuring network
coverage; reducing the cost of mobile phone data; and putting into place Boards
at two public enterprises, namely the Royal Science and Technology Park and the
Eswatini Communications Commission. As he juggles the two ministries’
responsibilities, Khumalo gives the assurance that he has been able to find the
balance.
The minister then answers my questions regarding the long-dragging process to
terminate the 22-year old Joint Venture Agreement between MTN Eswatini and
Eswatini Posts and Telecommunications Corporation (EPTC). EPTC holds a majority
41 per cent shares at MTN Eswatini but now wants out so as to operate its own
mobile telecommunications company, which they were granted a licence for – the
third in the country.
At least three previous ministers have had to deal with this issue but they had
not seen the divorce through by the time they exited office.
But what has Khumalo done to address this issue in the less than two months he
has been with the ICT portfolio?
destination
“I’ve worked on this very hard over the last month and I think I even
surprised myself. I think I understand the issues very well at this stage and,
to be fair, Her Royal Highness had kept us as a Cabinet team updated on that
issue.
So, I did have some basic, rudimentary understanding of what she had done up
until the point she left. But I’ve then had to get on to the next level of
detail and the next level of detail and the next level of detail,” the senator
says.
To show the level of progress he has made, he even presents what is on his
schedule: “Before the end of April, I will be presenting a proposal to Cabinet
for EPTC to divorce from MTN because that is a destination that Cabinet has
approved in the Strategic Road map; it is a destination that the regulator has
recommended to Cabinet; it is a destination that the ministry wants to pursue;
and it is a destination that EPTC has also embraced. So there is no issue with
that.”
It is known that the stumbling block has been the value of the shares that EPTC
holds at MTN Eswatini; so what action has the minister implemented in this
regard?
“The terms of the separation in terms of recovering your value in the
investment have been an issue for some time and I don’t know really what the
hold-up was. But we’ve just finished the valuation of the shares and we would
be able to convey that to government and ask for permission to sell the shares.
The valuation of the shares won’t be a holdup now. We’re not there yet (at
the stage where all parties can express their happiness on the value of the
shares). We’ve just completed the process. I can’t share as to who conducted
the valuation of the shares because that’s proprietary information and I’ve
to share it with Cabinet,” he explains.
He appears to be so sure of the April time frame; hence he is probed further on
this.
confidence
“I am very confident of delivering the report to Cabinet by end of April. I am
not saying the report will be accepted; I am not saying we’ve a buyer for the
shares; I’m not saying MTN is happy or not; I’m just saying we’ve finished
the valuation process and I will be presenting the report to Cabinet to decide
whether to continue with the sale or not, on the basis of what we will be
presenting to them as the ministry.
To me it’s a very important milestone because we’ve never been to this
point. So the next point is to say here are the shares and they cost so much and
if you disagree with the valuation you would have to tell me why,” the
minister states with added confidence.
Khumalo states that the other shareholders at MTN Eswatini, namely; MTN
International, Swaziland Empowerment Limited and Esteemed Shareholder, have not
yet been engaged regarding the report and the sale of the shares.
“The first person that we will engage with is the owner of the shares, which
is Eswatini Government. They will give us direction to engage with all of these
people (MTN, SEL and Esteemed Shareholder). I can confidently say there is
enough appetite for these shares but what we don’t know is whether they would
still be interested once they know their value because people have a concept of
what the value should be.
Once they see the actual value I don’t know whether the appetite will still be
the same. But I’ve every reason to believe that we will find a buyer for these
shares,” he continues.  I ask him what he has done differently from his
predecessors such that he has been able to overcome what has been their
stumbling block all along.
“I need to give credit where it is due; it has mostly been Her Royal Highness,
working on what needs to be done. We had a good handover, she told me where this
was and my role was just to make sure that I encourage the people that were
doing the work to actually finish it,” he acknowledges.
He reiterates this point: “We did a handover; as soon as I was announced we
did a proper handover of what she was working on. She had done a lot of heavy
lifting, so to speak; my job was just to complete the play, which I have.”
decision
As all these things are happening, Khumalo says he cannot honestly answer with
confidence what the feeling of the other shareholders is towards the divorce and
having more players in the mobile telecommunications industry.
“I think our guiding principle here is mostly the view of government in terms
of the destination of the industry. The second guiding principle is the
recommendation by the regulator in terms of making sure that free market
economics are at play in this industry and, thirdly; consumers are paying fair
value for the service,” he states.
The senator understands that some people will have a favourable impact after
this happened but is also cognisant of the fact that others may perceive this as
not a good thing.
“However, ultimately those guiding principles are what are driving us. So we
obviously will engage once government, as owner of the shares, has made a
decision to say this is how we want to proceed. We will engage all stakeholders
and ensure that we are not making the environment worse off; but we want the
environment to be free market economics. That’s what we are trying to do,”
he elucidates.
density
He then refers me to a study that was conducted while he was still at Coca Cola,
which he makes me aware, however, that he is not sure of its accuracy today, but
it was then. “We found that the speed of internet in Eswatini, in terms of the
applications we were using, was 10 times slower than the global average and it
was four times more expensive. And I am sure businesses will relate to this
problem and I am sure individuals will relate to this problem,” he tells me.
He goes on: “His Majesty the King, in his Speech from the Throne, gave us, as
the Ministry of ICT, the mandate of free Wi-Fi in high density areas and at
Tinkhundla, which is something we will deliver because the King has ordered that
we do. Without fixing this, it’s impossible because we can’t fix the
business environment in terms of accessibility and affordability of data at a
global standard level. We said ‘we are open for business’, so this is one of
the things we need to fix.”
The minister further tells me that if Eswatini is to realise its future
prospects of being an export-driven economy, then it means the country needs to
be trading on e-commerce platforms and using basically data as the new oxygen
for the economy.
“So how do you get there if you don’t do this? The players need to
understand the bigger goal and adapt their businesses accordingly,” he says.
He draws my attention to what he says is the biggest challenge towards this,
that of EPTC being able to survive after the unbundling process, which will see
the corporation being separated into three companies; one for infrastructure,
another for mobile telecommunications and the third being postal services. This
moves the minister to address me about the second aspect he is working on
regarding EPTC, which he says was being worked on by Her Royal Highness and he
is just accelerating it.
This, I am told, involves the International Telecommunications Union (ITU),
which I learn has agreed to work with government in drafting a strategy of how
to successfully unbundle EPTC, by looking at best practices by other countries
which have been through a similar process.
engagement strategy
“They (ITU) will also give us the best strategy of how to get there. There are
two things that need to happen then; firstly we need to embrace the
recommendation they are going to make. Once we embrace that then we also embrace
the strategy they will propose to get there as government. I am expecting that
work to be finished in April. And again, before the end of April I will have
presented both things because I think both things have to go together; doing one
without the other does not make too much sense, so the best thing is that it’s
dovetailing nicely to the end of April. So, April is a big month for us in
ICT,” I am informed.
I am also told that in the May/June timeframe, if things go according to plan,
the expectation after a very consultative process once Cabinet sort of aligns on
the concept, destination and the strategy, lobbying of parliament, senate,
industry players, the regulator and others will commence.
Khumalo says they will then need to have an engagement strategy where they will
speak to all different players and influencers.
Having said all these, the minister, as a parting shot, then reminds me of the
big elephant in the room; EPTC has a big struggle with a huge deficit in its
pension fund.
The minister says a big part of the solution has to answer this question: how
will EPTC fund their pension fund?
“It’s now heavily underfunded and part of the solution has to answer that
question. And I think that liability will grow even bigger because if you
unbundle and dismantle an organisation like EPTC you have to pay the employees
their benefits. So not only does EPTC have to solve the underfunding of the
pension fund but also has to solve the problem of how they fund the redundancies
that will come from the unbundling. So, all those calculations have to make
sense.
The ITU proposal puts all of that into perspective, so that by the time we
present we’re presenting a business case really and we’re not presenting a
wish-list of things we could or may do. But I have confidence that the numbers
are moving in the right direction and we hope all will be implemented,” he
adds.
The interview has taken almost 26 minutes, which then gives the minister much
time to prepare for his next meeting, which he tells me is at 4:30pm at Cabinet
office.
As we say our goodbyes, Khumalo asks if I now have hope that the EPTC/MTN
‘divorce’ will finally happen.
“Of course, from what I heard today, it looks promising,” I respond as I am
led out of the office by Thabile.