This article reviews the international trend towards liberalization of telecom- municatlons, and then describes the hlstory and present structure of the sector in South Africa, which shows both First World and Third World fea- tures as a result of the apartheid sys- tem. Like many other countries, South Africa has in recent years taken steps to dismantle the old parastatal telecom- munications monopoly, and has embraced commercial principles, but has stopped short of prlvatizing telc communlcatlons, largely because of the opposition of the African National Congress. The author argues that there are good reasons to resist the call for prlvatlzation since in South Africa the overrlding prlorlty must be to extend basic telephone service to the African mjorlty, and thls probably cannot be echieved by relying on market forces. The author is Associate Professor, Depart- ment of Communication, University of Cali- farnia at San Diego, 9500 Gilman Drive, La Jolla, CA 92093-0503, USA. The politics of telecommunications reform in South Africa Robert B. Horwitz South Africa, as nearly everyone who follows the news is aware, is in the midst of momentous political change. Historically banned political organizations, including the African National Congress and the Com- munist Party, have been legalized, and representatives of the black majority are engaged in difficult negotiations with the white government on establishing new political ground rules and structures. The formal laws of apartheid have been largely rescinded. Less noticed than thkse highly visible political changes is an important transformation of South Africa’s political economy. Long a highly interventionist state, characterized by extensive involvement in the economy, recently the South African state has been scaling back its economic activity dramatically. Historically, of course, the principal focus of the state’s intervention in the economy was to control labour markets under the apartheid system. Apartheid secured a continuous flow of phenomenally cheap black labour to white farms, mines and factories. But state intervention in South Africa also entailed the operation of monopolistic public corporations in many areas of econo- mic life - corporations known as ‘parastatals’. In the past few years the South African government has been engaging in a withdrawal from its extensive involvement in the parastatals. Telecommunication is one of several sectors, including electricity and transportation, oil, iron and steel production, where this retrenchment of state intervention is taking place. Historically operated out of the Post Office, telecommunications had been run through the office of the Minister of Communications and Transportation as part of a traditional post, telephone and telegraph (PlT) monopoly. This changed in October 1991, when the South African Posts & Telecommunications (SAPT) was set free from direct ministerial control. The new company, Telkom SA, became a company formally registered under the South African Companies Act (South Africa’s formal statute establishing the law of corporations) with the state as the sole shareholder. SAPT thus relinquished its joint role of player and regulator, and South African telecommunications entered an era characterized by liberalization and deregulation. At the most basic level, South Africa has embarked upon a fundamental process of restructuring its telecommunications institutions and has begun the 0306-5961/92KMO291-16 0 1992 Butterworth-Heinemann Ltd 291