The government and unions are set for battle over the restructuring of telecommunications
Jubie Matlou
Tough negotiations lie ahead between the government and the Congress of South African Trade Unions (Cosatu) over the listing of Telkom on the securities exchange.
Telkom is the first of the public utilities that the government has earmarked for privatisation, a move that has triggered fierce opposition from the labour federation, which includes a threatened general strike and a wave of mass demonstrations beginning this month.
The broader issue is the country’s macro-economic policy with the attendant priorities of economic stimulation and job creation. Cosatu believes that the government has departed from the reconstruction and development programme the glue that holds the tripartite alliance together by succumbing to globalisation pressures to deregulate and privatise essential social services such as transport and telecommunication.
A detour is definitely discernible in government policy, but the rear-view mirror appears not to have lost its focus. The government wants to divest from Telkom with an initial public offering to raise between R12-billion and R18-billion and the latest telecommunication policy directives seek to empower other public utilities to enter the profitable telecommunication market.
Sentech, the broadcasting signal distribution utility, Transtel and Eskom are set to enter the lucrative market as carriers of international telephone traffic, and as the second and third telephone service providers respectively.
This trend in government policy is not new. It seeks to lure foreign direct investment by opening up a market for new players and at the same time to raise capital that could be used to deal with socio-economic problems such as health and welfare, housing and job creation. It happened with the SABC when the government passed special legislation to keep the R500-million that accrued from the sale of the six regional radio stations.
The expected revenue from the listing of Telkom could be heading for the same kitty.
Restructuring and deregulation of markets often comes at a price. With the SABC it was the retrenchment of 1 400 workers, with Telkom about 4 800 workers a figure the Communications Workers’ Union (CWU) considers an understatement.
The communications sector summit coming up in October is one forum for thrashing out a mutually acceptable solution to the problem of job losses in the restructuring of public utilities.
The government intends to use the listing of Telkom to broaden share ownership among black groups, through small and medium enterprises, but the CWU wants the shares to be sold to co-operatives established by retrenched Telkom workers as opposed to the “enrichment of individuals through black economic empowerment”.
Information and communication technologies are highly regarded not only for transforming economies from a mode based on the mass production of consumer goods to service economies based on information production, processing and distribution but also for their potential to address imbalances of access to education, welfare, health and information.
Universal service policy is in place and the telephone infrastructure is ready for connection. So are the mushrooming Internet and multimedia centres in poor communities and schools.
What matters now is an innovative solution to foot the bill for the rollout of rural telephony.
The investment in Cell-C, the new mobile telephone service provider, has made Saudi Arabia the leading foreign direct investor for this year, and telecommunication and information technology the sector attracting the most foreign direct investment in the first quarter of the year.
However, foreign direct investment is not the panacea for all our economic ills. Stimulating local economic activity is equally important either through co-operatives and small enterprises or a combination of the two.
The telecommunications policy directives issued by the government a month ago earmark the rural telephony market for emerging small businesses.
South Africa is famous for coming up with innovative solutions, as demonstrated in the 1994 constitutional settlement. It still has to prove to the world that it has the tenacity to tackle complex challenges posed by increasing transnational economics that there are local solutions to global challenges and that the local telecommunication market could be one such solution.
As for the vogue presented by new information and communication technology, manufacturers should take into account consumer use as dictated by daily routines. It is unthinkable for an individual who spends a day working on a PC to get home and sit upright in front of another desktop to watch the evening news or use a cellphone to listen to a new CD.
Wired and wireless technologies will still complement each other in the future, in much the same way that television failed to replace film and radio as an entertainment media.