David Le Page
Telkom this week announced price increases for local calls and complained of anticipated decreased profits, due to “streamlining” in preparation for competition in 2003.
But these manoeuvrings continue to mask apparently massive inefficiency within the corporation.
A crude comparison with British Telecom, which has also had to fight its way into competitiveness following privatisation, shows that Telkom employs approximately four times as many people per line maintained.
This is a substantial difference, even taking into account differences in geography, the strains on Telkom from crime, the need to train a more representative workforce, and its more recent privatisation.
The British company is gearing up to support an Internet economy, recently announcing its intention to drop the cost of Internet calls. Telkom’s decision to increase the cost of local calls seems to demonstrate a different approach.
Raising the cost of local phone calls in South Africa may amount to being a missed opportunity to encourage Internet usage, or stimulate an emerging information economy.
Queried recently on the cost of data calls, Telkom responded: “[South Africa has] a much greater discrepancy between the information-poor and the information-rich than is the case in Britain.
“As both a national, mainly government- owned communications company and a responsible corporate citizen, we are applying a balanced approach that serves the needs of both of these groupings.”
Telkom cited its establishment of 1 000 Internet-equipped computer centres at schools across the country as representative of this approach. It also cited its maximum- R7-a-local-call weekend promotion earlier this year. But no plans to repeat the promotion, or make it permanent have been announced.
Cellular networks MTN and Vodacom also have responsiblities as corporate citizens which form part of their licence conditions.
But reliable industry sources this week said the cellular giants may cut the cost of cellular data calls in the new year, in an effort to seize part of what will soon be a fast-expanding wireless data market.
The danger in Telkom’s approach, particularly its pricing of local calls, according to analysts, is that it may limit the growth of the Internet economy. Rather than remaining a separate preserve, the Internet is becoming a lubricant for normal business operations around the world.
This is demonstrated by the rapid increase in e-commerce, no longer only the preserve of enthusiasts buying software. Business-to-business e-commerce is the fastest growing component of Net commerce, according to Andersen Consulting.
The Internet is now an increasingly accepted day-to-day business tool. Telkom is supported in its opposition to any kind of competition in the telecoms sector by a licence which was drawn up five years ago, when the impact and importance of the Internet were far from clear to South African regulators.
The crucial problem introduced by the Internet is that no distinction is made between data which is going to become words on a screen, and data which will become the sounds of someone talking to you from around the world.
Rather than seeking an accommodation with companies attempting to get a foothold in the telecoms sector, Telkom is fighting them tooth and nail, as demonstrated in its wars with the South African Value Added Networks Service Providers Association (Sava).
Value added networks take advantage of data circuits permanently leased from Telkom to provide additional services such as low-cost faxing, and, potentially, low-cost voice calls.
On Wednesday, the Pretoria High Court referred back to the South African Telecommunications Regulatory Authority (Satra) the dispute between Telkom and Sava.
The two-month-old dispute started when Telkom began withholding services to Sava members.
Prior to that, Satra ruled in Sava’s favour, when Sava accused Telkom of anti- competitive behaviour, after having sought written assurances about the kinds of services they would provide.