Comparing South Africa’s telecommunication charges to that of other countries, South Africa is generally more expensive and price increases in recent years were also generally higher than in most other countries, according to Efficient Research economist Dawie Roodt.
Presenting a report in Johannesburg on Tuesday that was commissioned by three unions to look into planned retrenchments at the telecommunication giant Telkom, Roodt said: “In some cases telecommunication costs in South Africa are extraordinarily high.”
According to the report, Telkom no longer intends to shed 4 100 jobs but rather intends to retrench 7 600 people.
The report of more than 100 pages was produced by the commission of inquiry appointed by the trade unions in Telkom — Solidarity, the Communication Workers Union and the South African Communications Union.
Roodt added that a certain telephony pricing by Telkom was also identified and that this corresponded to countries like the United Kingdom and Australia. This strategy entails relatively low initial and recurring costs but high operational costs.
Conversely, countries like New Zealand and the United States follow a strategy where the initial or connection charges are high combined with relatively high recurring costs, but with relatively low or even no operational costs.
“The cost of telecommunications in South Africa is further mirrored in demographic data. Naturally the high cost of telecommunications has a large impact on demand,” Roodt noted.
He stated that the inevitable effect is that in South Africa, telecommunications connections and access are limited and that the people in the country are increasingly finding themselves on the wrong side of the digital divide.
The commission by the three unions at Telkom cost R200 000 to set up, with Telkom refusing to be part of it.
The report suggested that if Telkom had been 100% privatised in 2000, an additional sum of approximately R50-billion would have been available to the authorities.
“Assuming this amount was utilised exclusively to reduce state debt it would have resulted in interest expense saving of more than R6-billion per year since 2000, apart from the other advantages of a liberalised telecommunication market.
“I don’t blame Telkom for this but rather the politicians for not handling telecommunication legislation properly,” Roodt added. – I-Net Bridge