Telkom blasted for service
By Edwin Naidu
Telkom, the country's only fixed-line telecommunications operator, has come under fire from the government for its poor service and high prices.
The government says the telecommunications giant has failed to keep South Africans, especially rural people, connected.
"More than two million people have had their telephone lines cut in the past five years, partly because costs of maintaining a phone line are so high," said Roy Padayachie, the Deputy Minister of Communications.
Padayachie was speaking at an indaba in Midrand this week attended by more than 400 delegates.
Telkom came in for a stinging attack from some of the delegates who condemned the company's high prices and suggested ways in which the government should intervene, including pressurising Telkom to lower its rental and call prices and banning it from disconnecting services, unless the lines are being used for illegal purposes.
Padayachie said disconnections were unacceptable, since Telkom had benefited from a R4.5 billion government recapitalisation investment in 1997 for the roll-out of 2.69 million fixed lines.
Telkom - which is listed on the New York Stock Exchange and the JSE Securities Exchange SA, reports huge profits and pays its senior managers handsomely - was chastised by the deputy minister for imposing reconnection fees of more than R300.
The government still holds a large stake in Telkom.
Padayachie said that the government was planning to finalise the second national operator, which would compete with Telkom, in November, and would be in business by April.
Padayachie said competition would not necessarily bring down prices in the short term, but in the future it should benefit consumers.
He said the increase in cellphones - an estimated 25 million are in use - could be in response to the high cost of fixed lines.
The deputy minister said the government was considering changing regulations to give the Independent Communications Authority of South Africa more powers to act against Telkom's exorbitant pricing.
A report said the government and business were concerned at the failure of Telkom to provide any service to the country's rural and poorer communities, adding it frequently turned down requests for new lines.
"Numerous reports detail Telkom's failure to install new lines on the waiting list . . . because they are not economically viable or or there are no infrastructure plans in the area in question," the report said.
Telkom has not honoured the agreement in its licence conditions, to install 200 000 lines, opting instead to pay a fine.
"Sometimes it appears that business decisions are made instead of decisions that resonate with the government's obligations, as spelled out by President Thabo Mbeki in his state of the nation address in February," Padayachie said.
Lulu Letlape, a Telkom spokeswoman said Telkom had installed 2.6 million additional lines by May 2002 but there had a been a shortfall of 16 000 lines, for which Telkom paid a fine of R10 million.
"Telkom is a demand-driven business, we work on the number of orders that come through," Letlape said. Telkom would welcome competition, including the possibility of unbundling parts of its business, she said.
Published on the web by Sunday Tribune on October 15, 2005. © Sunday Tribune 2005. All rights reserved.
By Edwin Naidu
Telkom, the country's only fixed-line telecommunications operator, has come under fire from the government for its poor service and high prices.
The government says the telecommunications giant has failed to keep South Africans, especially rural people, connected.
"More than two million people have had their telephone lines cut in the past five years, partly because costs of maintaining a phone line are so high," said Roy Padayachie, the Deputy Minister of Communications.
Padayachie was speaking at an indaba in Midrand this week attended by more than 400 delegates.
Telkom came in for a stinging attack from some of the delegates who condemned the company's high prices and suggested ways in which the government should intervene, including pressurising Telkom to lower its rental and call prices and banning it from disconnecting services, unless the lines are being used for illegal purposes.
Padayachie said disconnections were unacceptable, since Telkom had benefited from a R4.5 billion government recapitalisation investment in 1997 for the roll-out of 2.69 million fixed lines.
Telkom - which is listed on the New York Stock Exchange and the JSE Securities Exchange SA, reports huge profits and pays its senior managers handsomely - was chastised by the deputy minister for imposing reconnection fees of more than R300.
The government still holds a large stake in Telkom.
Padayachie said that the government was planning to finalise the second national operator, which would compete with Telkom, in November, and would be in business by April.
Padayachie said competition would not necessarily bring down prices in the short term, but in the future it should benefit consumers.
He said the increase in cellphones - an estimated 25 million are in use - could be in response to the high cost of fixed lines.
The deputy minister said the government was considering changing regulations to give the Independent Communications Authority of South Africa more powers to act against Telkom's exorbitant pricing.
A report said the government and business were concerned at the failure of Telkom to provide any service to the country's rural and poorer communities, adding it frequently turned down requests for new lines.
"Numerous reports detail Telkom's failure to install new lines on the waiting list . . . because they are not economically viable or or there are no infrastructure plans in the area in question," the report said.
Telkom has not honoured the agreement in its licence conditions, to install 200 000 lines, opting instead to pay a fine.
"Sometimes it appears that business decisions are made instead of decisions that resonate with the government's obligations, as spelled out by President Thabo Mbeki in his state of the nation address in February," Padayachie said.
Lulu Letlape, a Telkom spokeswoman said Telkom had installed 2.6 million additional lines by May 2002 but there had a been a shortfall of 16 000 lines, for which Telkom paid a fine of R10 million.
"Telkom is a demand-driven business, we work on the number of orders that come through," Letlape said. Telkom would welcome competition, including the possibility of unbundling parts of its business, she said.
Published on the web by Sunday Tribune on October 15, 2005. © Sunday Tribune 2005. All rights reserved.