SOUTH African fixed-line phone utility Telkom marked the end of its monopoly on Tuesday, saying there was still scope to become more efficient ahead of its listing — the government’s biggest privatisation yet.
Telkom Chief Executive Sizwe Nxasana told reporters that he was disappointed that even though Telkom’s so-called official ”period of exclusivity” had ended, a second full-scale network operator was not yet up and running.
”We have been preparing for this day. We need customers to be able to compare the levels of service,” he said.
After countless delays, the authorities are due to issue a licence to a second full-scale telecoms operator later this year. But on Monday they issued a multi-media and an international gateway or ”carrier of carriers” permit to state-owned Sentech.
Sentech’s licences heralded the end of Telkom’s monopoly, but it is not clear when exactly the signal distributor will be ready to roll out its broadband or wholesale international call routing services.
”There is still a lot of scope for improvement,” Nxasana said, adding that Telkom’s customer service levels could be better, even though they had moved closer to international standards. He said there was also more room for job cuts.
The ratio of the number of lines per employee — a key telco efficiency measure — had increased to 113:1 in 2001 from 82:1 in 1998. But he said the developing world benchmark was between 150:1 and 200:1. Telkom employs around 43 000 people, after slashing some 17 000 jobs in the past few years.
In 1997 Telkom was given five more years of monopoly to allow it to prepare for competition and roll out 2,8-million new lines — many in remote rural areas. It was also told to rebalance its tariffs — reducing the subsidisation of local calls by international ones — and modernise its network.
Nxasana said the fee rebalancing and line rollout was over and Telkom was no longer required to rollout in the countryside.
”Our universal service obligations came to an end last night and no new ones have been set,” he said.
All Telkom’s energies would now be focused on upping customer satisfaction — particularly among corporate clients who are likely to be the target of a full-scale Telkom rival.
Nxasana said subscriber retention schemes were in place, but he would not comment on the likely effect on margins of a competitor. ”We don’t know if they will start a price war.”
In a repeat of Telkom’s long-voiced concerns about South Africa’s telecoms regulation, Nxasana said legislation and regulation were often contradictory and clarity was needed ahead of the group’s initial public offering.
The long delayed IPO, which was put off last year due to weak telecoms markets and delays in state telecoms policy, is now scheduled for before the end of March 2003. The government says it will be its ”landmark” privatisation, setting the scene for more sales of state assets.
Telkom is 30% owned by SBC of the United States and Telekom Malaysia. Analysts expect about 20% of the group to be listed by next March. – Reuters