The creation of a second fixed-line telephone company in South Africa could be delayed by a row over the allocation of shares to specific groups.

Black economic empowerment groups have been invited by the government's communications department to apply for a 19% stake in the new company.

A controlling 51% stake is to be sold separately to a group of international investors.

South Africa's telecoms watchdog, the Independent Communications Authority of South Africa (ICASA), claims this move is illegal, and says both stakes should be sold at the same time under a single invitation.

The communications department denies that the scheme is illegal.

Necessary intervention?

Eddie Funde is president of the South African Communications Forum, which promotes participation by black people in the information and communications technology sectors.

Mr Funde said action is needed to counter the effects of the apartheid years when black people were not allowed to get involved in business.

"It is necessary for some kind of intervention to take place," Mr Funde told the BBC's World Business Report.

The remaining 30% stake of the new company will be set aside for state-owned companies Transtel and Esi-Tel.

Competition in the market was made possible by the Telecommunications Amendment Act, passed last year.

The monopoly currently enjoyed by fixed-line provider, Telkom, is due to end next month.

The new company will use the existing infrastructure of Telkom for two years while it builds its own network.