The government will not sell its stake in Telkom to raise funds for Eskom to help it increase its electricity-generating capacity and spur economic growth, said Minister of Telecommunications and Postal Services Siyabonga Cwele.
But it might cash in its share in cellular services provider Vodacom, he indicated.
Speculation that Telkom was in the shop window grew when Finance Minister Nhlanhla Nene said in September that the government would sell "assets" to give Eskom R20-billion in support and to increase the bond guarantees it could offer the utility's lenders.
The electricity provider faces a R225-billion funding shortfall.
Although Nene did not specify which assets would be sold, Telkom was at the top of the list discussed by analysts.
"We're not selecting Telkom because we want it to give internet connectivity," Cwele said at the Mobile World Congress, in Barcelona, this week.
"It's strategic. We're not going to sell Telkom."
The government owns almost 40% of Telkom, which is valued at about R17.6-billion. Africa's biggest fixed-line operator will lead the expansion of internet access to every household by the end of this decade, according to the National Infrastructure Plan.
Eskom intends to invest R138-billion by March 2018, according to the Treasury. The government will give the utility R20-billion this year and another R3-billion in 2016, the money to be raised by the sale of state assets.
The government favoured the sale of its 13.9% stake in Vodacom, it was reported last month.
Cwele said that although the Vodacom stake was not long-term "it is a useful investment to us."
"It brings a lot of revenue into the government. But it's not so [essential] in terms of delivering services to people."
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