Should Telkom be nationalised?

[MickeyD]

What are the pros and cons of de-listing Telkom and nationalising it?

Keep the politics out of this please.

Assume that we are in Utopia and that there is a good management team in place, with the best interests of the public at heart and not prone to political manipulation. (if you do want to head down that avenue, please create your own thread in CA sub-forum)

Some factors:
1. There could be a single state communications entity (incorporating Broadband Infraco and SITA and all those other little splinter groups hidden away in state budgets - like a portion of Sentech!!!).
2. The incentive to make massive profits to please shareholders/investors is removed.
3. Regulated pricing at a level to cover reasonable costs + new network investment capital, i.e. no tax money required.
4. Use the incorporated fibre backhaul to set up a single massive core network and create POPS all over SA where private companies can connect.
5. Immediately implement LLU at a very reasonable price (see #2).
6. GET OUT OF THE RETAIL SECTOR!!! - sell off Telkom Business and Consumer (including TI) and the SITA portions to the highest bidder.

Bottom line is that Telkom's focus will be as a core network provider. The private sector must provide the retail products.

Thoughts?

 

[ToxicBunny]

No they should not.

Granted there are arguments for both sides, but I feel that given how our public sector has a tendency of screwing up everything they touch, that Telkom should never be privatised. If our government showed progress towards having efficiently run state owned enterprises my tune MIGHT be different.

 

[MickeyD]

No they should not.

Granted there are arguments for both sides, but I feel that given how our public sector has a tendency of screwing up everything they touch, that Telkom should never be privatised. If our government showed progress towards having efficiently run state owned enterprises my tune MIGHT be different.

Read my assumptions...

 

[ToxicBunny]

Read my assumptions...

I don't like assumptions..

But IF your assumption were true, then yes I would be for it considering the already large national network they have and the ability that would exist to extend that network at a rapid pace.

 

[DJ...]

No, but that's because it runs counter to everything I believe in with respect to small and large government...

 

[MickeyD]

But IF your assumption were true, then yes I would be for it considering the already large national network they have and the ability that would exist to extend that network at a rapid pace.

I would like to see an overlay of a combined core network comprising of ALL state owned telecommunication assets. This includes optic fibre, copper, satellite, undersea, radio and microwave links.

 

[koeksGHT]

Politics not aside, keep dreaming.

Nothing should be state owned, only regulated. Unless its a partnership

 

[ToxicBunny]

I would like to see an overlay of a combined core network comprising of ALL state owned telecommunication assets. This includes optic fibre, copper, satellite, undersea, radio and microwave links.

That would be something epic to see I think...

I have a distinct feeling we would be surprised at just how wired up this country is, but its on many disparate networks.

 

[MickeyD]

Just a note here... I'm going to play the Devil's Advocate on this one. I see this as a sharing of ideas, no matter how far out of the box they are.

The objective should be to deliver a core network capable of providing quality broadband at a reasonable price to as much of our population as possible.

 

[DJ...]

The objective should be to deliver a core network capable of providing quality broadband at a reasonable price to as much of our population as possible.

Why are the government in the best position to provide this?

 

[MickeyD]

Politics not aside, keep dreaming.

Nothing should be state owned, only regulated. Unless its a partnership

In that case how will you get broadband into the bundus at the same price as in the urban areas? Or don't you care about providing broadband in sticks?

 

[Fulcrum29]

It comes down for me how the government will deal with your #6, it is already ugly (even with leaving politics aside).

 

[MickeyD]

Why are the government in the best position to provide this?

To remove the profit-factor in providing core network services... any private company would want a return on such an investment, which would push up consumer pricing.

What's the alternatives?

 

[MickeyD]

It comes down for me how the government will deal with your #6, it is already ugly (even with leaving politics aside).

They would need that initial cash to buy out the existing shareholders... :twisted:

 

[Gulio]

People would still have a problem with it.

 

[Fulcrum29]

It would be interesting to have Telkom establish a Forum and/or consortium, open to enter the service channels, although this must be limited to participating parties I’m sure expansion and needs will be determined more accurately, also opening communication services outside the borders to welcome entities abroad as they can bring service levels and technology (global standard and latest) to the table. The only gain to participate is by gaining opportunities within a consensus or by pooling resources to achieve goals and inviting mid-tier providers to support general missions so that we can maintain service levels. Entry-tier providers on the other hand can be sourced.

 

[MickeyD]

People would still have a problem with it.

Please expand a bit...

 

[DJ...]

To remove the profit-factor in providing core network services... any private company would want a return on such an investment, which would push up consumer pricing.

What's the alternatives?

We're bordering on shifting from theoretical to practical implementation now. Government SOCs operate with a profit motive as well. You'd have to consider implementing communism in the world's first successful iteration thereof for this to be successful.

Even if we shift that aside, profit incentive breeds innovation. Competition is hardly a bad thing. Remove the profit factor and how do you propose SA remain globally competitive? We can only truly operate existing assets. We'd need government (tax) investment for capex expenditure. So either way we pay more. On the one hand we pay it into an organisation inentivised to spend efficiently. On the other we pay it into an organisation incentivsed not to. I know who I'd want to be handing my money over to.

I don't believe that protectionism of a monopoly is the answer to problems created by said monopoly to begin with. In fact I don't think that artificial monopolies are suitable in any economic environment. If we're talking utopia, then I'd propose an auction of all government assets across multiple players in the market and allowing the private sector to weed out the good from the bad. In this utopia, of course...

 

[grok]

Problem is there's no way to keep politics out of it ..

Could a government run Telkom more efficiently. Maybe.

Could current government run Telkom more efficiently. Hell no, not given their track record.

 

[MickeyD]

We're bordering on shifting from theoretical to practical implementation now. Government SOCs operate with a profit motive as well. You'd have to consider implementing communism in the world's first successful iteration thereof for this to be successful.

Even if we shift that aside, profit incentive breeds innovation. Competition is hardly a bad thing. Remove the profit factor and how do you propose SA remain globally competitive? We can only truly operate existing assets. We'd need government (tax) investment for capex expenditure. So either way we pay more. On the one hand we pay it into an organisation inentivised to spend efficiently. On the other we pay it into an organisation incentivsed not to. I know who I'd want to be handing my money over to.

I don't believe that protectionism of a monopoly is the answer to problems created by said monopoly to begin with. In fact I don't think that artificial monopolies are suitable in any economic environment. If we're talking utopia, then I'd propose an auction of all government assets across multiple players in the market and allowing the private sector to weed out the good from the bad. In this utopia, of course...

I do mention that pricing will not be at cost but would be reasonable enough to cover Capex required for network expansion/upgrades. Ergo no tax money required.

Profit is only one of several targets that can be implemented to incentivise the company and it's workforce to ensure that they remain competitive.

Also remember that you will have a larger private sector involvement and they will have the option of building their own core networks or leasing it from Telkom. If Telkom don't step up they die.