SA'S SNO UNDER PRESSURE TO GET READY FOR LAUNCH

Telecoms

The shareholders of the muchd elayed second network operator (SNO) have given the assurance that preparations for the licensing of the telecoms provider are proceeding at a rapid pace.

The chairman of the steering committee Karl Socikwa said yesterday that shareholders were working hard to fine-tune their business model before submitting it to the communications regulator, the Independent Communications Authority of SA (Icasa).

The launch of the second fixed-line operator is expected to end the de-facto monopoly of the incumbent operator Telkom. The expectation is that the entry into the market of the SNO will significantly lower the costs of telecommunications and improve the ability of SA businesses to compete in the world's major markets.

Socikwa said the second operator would be launched towards the end of the year -- more than three years later than originally scheduled.

The integration of the telecommunications activities of Transtel, of which he is CEO, and Eskom Enterprises to form the network backbone of the SNO was also being finalised, said Socikwa.

Icasa said recently that it would issue an operating license only once the shareholders' agreement was signed. The communications regulator said it would ensure that the operating licence was issued as soon as possible thereafter.

Delays in the launching of the SNO had resulted in the Eskom group raising an impairment provision of R649m against its investment in the proposed company two years ago.

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Eskom is expected to announce a further impairment provision of R1bn against its telecommunications investments when it releases its 2004-05 financial results in two weeks.

The company had already spent R748m in the 2003-04 financial year to establish full-service network infrastructure in preparation for its participation in the SNO.

Business Day