Telkom's share scheme attacked

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Telkom slammed over profit

Telkom slammed over profit

16/03/2006 19:02 PM

Johannesburg - Solidarity is set to launch what it calls a "Fair Share campaign" against the unequal distribution of profit sharing at telecommunications giant Telkom (TKG), the trade union announced on Thursday.

The launch of the campaign follows a wage dispute lodged by the trade unions against Telkom.

Furthermore, Solidarity has also joined hands with the Cosatu-aligned Communications Workers Union (CWU) to organise a national strike.

The unions claim to represent more than half of the workforce at the dual-listed phone group.

The basic salary of company CEO Papi Molotsane is 46 times that of the minimum basic salary of workers at the bottom level, the union claimed, but Telkom declined to say what its chief's remuneration is - but it is understood that his salary is less than Sizwe Nxasana's pay.

According to the company annual report, Nxasana, who resigned late last year, earned a total of R2.139m - excluding bonuses and other fringe benefits - for the financial year ended September 2005.

Solidarity noted that in 2004 the CEO's profit share amounted to approximately R11m or 130% of his remuneration while the profit share of ordinary workers ranged between 3.39% and 9.85%.

This, asserted the union, amounts to as little as R2 700.

CWU and Solidarity are due to meet Telkom on March 20, with mediation by the CCMA, to seek a solution to the wage dispute.

However, if the mediation fails then Solidarity will go ahead and launch its profit share scheme campaign on Wednesday.

The unions were last year successful in forcing the phone group to put a moratorium on forced retrenchments, which in the process saved a few thousand jobs, while some employees opted for enhanced voluntary severance packages.

Telkom shares lost 0.10% or 16 cents to close at R155.84 on Thursday.

 

[ettubrute]

Furthermore, Solidarity has also joined hands with the Cosatu-aligned Communications Workers Union (CWU) to organise a national strike.

LOL! So now they want to strike, while they're loafing anyway? Oy, oy, oy! What a world!

 

[moosag]

You know, I hate telkom with a passion. Their absolute greed just cannot carry on. 2 Share price drops in a week. Its slowly but surely is starting to happen. Not fast enough, but telkom is finally going to get what it needs!
Things are hotting up!

 

[ignacio]

Everyone wants to feed at the trough, and consumers are meant to keep filling it up. Here's a novel idea: the CEO and the rest of the dead-weights stop sharing our fricking money and let us have it back.

 

[bb_matt]

Don't blame the workers, whatever you do - they are in the same boat - a strike is just what may be needed to wake Telkom the £uck up !

 

[mancombseepgood]

Well... my guess is that the guys striking are not the descision makers... it's about time they went on strike - hopefully for a couple of months to give the gov a wakeup call and maybe the sno will be given the infrastructure on a plate...
*and he wakes up and notices that his coffee is cold... and his rusk was stolen*

 

[LifelongGamer]

Personally I hope they don't strike. Some family of mine is (as per Telkom 10219) in the final stages of their ADSL Installation Order. All tests / checks etc. have been done and all that remains is for the Technician to make the physcial installation, convert the ISDN line and make an appointment to do the last bits at their premises (self-install is not enable in their Telkom Exchange).

If a strike takes place, not only will this delay new installations, but also further exasperate existing fault / repair efforts being experienced by existing clients.

To top it off, it will give Telkom a golden opportunity to shift blame : "Long delays in installations of new lines and fault repairs are due to continued strike efforts and interference by Unions" ... and you know they'll jump on that bandwagon in a heartbeat!

 

[stoke]

LOL ... when there's too much profit made everybody wants their share.
They cannot just give the profit back to us ... it's waaay too late.
I wish the employee's well and encourage the strike, a one week strike will bring that company to it's knees and embarras it's leadership. Something the leadership sorely needs.
Also ... when the workers get what they want they'll be in better spirits and we'll get better service for about 2 months.

 

[mikef]

http://www.sundaytimes.co.za/zones/sundaytimesNEW/business/business1142570840.aspx

 

[LifelongGamer]

LOL ... when there's too much profit made everybody wants their share.
They cannot just give the profit back to us ... it's waaay too late.
I wish the employee's well and encourage the strike, a one week strike will bring that company to it's knees and embarras it's leadership. Something the leadership sorely needs.
Also ... when the workers get what they want they'll be in better spirits and we'll get better service for about 2 months.

Telkom leadership won't be embarrased. They'll just use the strike action as motivation that the staff don't want to work, hence their desire for retrenchment packages.

It's also easy for those that already 'have' services to encourage strike action, forgetting about those that 'don't have' but want to aquire.

If a strike action takes place, why stop at 1 week? Why not 2 or 3 weeks? Heck, let them strike for a whole month. The workers will suffer the most from drawnout strikes. The economy will reel from the impact - how many business can cope without telecoms maintenance / upgrades / new lines / fault repair etc.? I can still see the press release : "Striking Telecoms Unions are responsible for holding the country to hostage". Management in most large companies always stick together - afterall they'll still be paid no matter how long the strike lasts.

Lastly, any concession Telkom has to give, would only end up coming out of consumer pockets sooner or later. Fat-Cats that are used to Supernormal Profits don't give them up easily - especially not once they're accustomed to the luxurious lives they have as a result of milking us dry year-in and year-out

EDIT: I almost forgot to mention: Telkom doesn't listen to government (it's largest shareholder). It doesn't listen to it customers (that provide it with revenue and keeps it in business). Why should they listen to their own staff? Worst case scenario, they retrench staff that no longer wish to work and hire people that are desperately in need of work to feed their families. There's always someone worse off if you just open your eyes and look around.

 

[stoke]

Erm ... those that want services are not currently getting them from teklom anyway.

Leadership won't be embarrased ? ... erm ... a publicly traded company is extremely succeptible [sp] to strike action. Ask Daimler Chrysler or any large Vehicle manufacturer. The board will make them scapegoats verrry quicky.

Bottom line is that telkom employee's are not a happy bunch and they must do something about that. They have every right to be rewarded for the company's success and must stand up and fight for that right.

During the strike MASSIVE pressure will be placed on govermint to get the issue resulved cos we all know it's their fault that we have this monopolistic situation to begin with. Governmint may just be forced into giving providers greater freedoms.

I stand by my encouragement to strike. Yup it will cost, and it could cost the teklom employee the most, but the potential rewards make it worth it. They must get themselves properly organised.

 

[MaD]

2 Share price drops in a week.

Yep.. Ivy must be pissed!

 

[mavx]

LifeLong, this is precisely why they should strike. You should have the choice to be able to phone around and get quotes from say 3 different service providers in your area and find out who will do the installation the quickest. Instead youre stuck with only one option and seem to be content. Because South Africans are used to terrible service, we put up with lame excuses and poor quality of service. For example (And I know its no way related in the least) the French youth are roiting over legislation that aren't happy about because it will affect their employment oppurtunities in the future, yes rioting. The average South African is willing to take what they can get simply because they couldnt be arsed to get up and do something about it.

 

[LifelongGamer]

LifeLong, this is precisely why they should strike. You should have the choice to be able to phone around and get quotes from say 3 different service providers in your area and find out who will do the installation the quickest. Instead youre stuck with only one option and seem to be content. Because South Africans are used to terrible service, we put up with lame excuses and poor quality of service. For example (And I know its no way related in the least) the French youth are roiting over legislation that aren't happy about because it will affect their employment oppurtunities in the future, yes rioting. The average South African is willing to take what they can get simply because they couldnt be arsed to get up and do something about it.

Hi Mavx,

Thanks for you input - it's appreciated. I agree with you for the most part. I admit I've become complacent to an extent. However, years of experience of business in this country has shown that major shakeups simply don't happen with the intended outcome - there has to be a compromise for things to happen and to minimise negative impact. We're getting competition in the form of the SNO-T and, yes, there are alternative options for broadband connectivity from wireless suppliers.

I've tried other options, but the sad reality is that ADSL Unshaped is still the best option for online gaming via international servers (which are the only ones I use. COH/COV, SWG / WOW don't have local servers ... and for good reason due to our current state of ICT). For continued support, service delivery (as shoddy as it can be) I would rather maintain the status-quo until such time as there is an alternative and I as a consumer can vote with my wallet. I feel your sentiments are admirable, but pre-emptive.

The only thing IMHO that would cause the desired effect of mass action is if the same majority that has placed our government in power takes an interest in this struggle. Unfortunately, as beneficial as affordable telecoms and the potential growth in employment this could have for them in the future, they have more pressing concerns such as housing, education, improved living standards and HIV/AIDS to contend with - which in comparison take precidence in their lives. I'm not belating any of this, merely pointing out facts. Majority, not minority, action is all that will shake things up sooner and as we all know, Telkom considers us a minority (albeit a vocal one).

There are two ways out of this that spring to mind:
1) Telkom concedes to the Unions demands before strike action is necessary (likelyhood of this happening ..? you decide - you know this daemon, we all do).
2) As a country we open a Trust Fund and make public donations to support the striking workers during their action and make it last as long as possible. When Telkom sees they're not operating (and thus not making extra revenue) and that the Telkom staff have the backing of the SA Consumer, then maybe they'll start to pay serious attention to they way in which they operate. Now what are the chances of this happening?

What will probably happen, is that Telkom will refuse, the strike action will take place (for however long it lasts). With the power outages, the fear of not broadcasting the 2010 WC, high crime rate, high unemployment rate etc. plaguing this country, Telkom will feel very little pressure and IMO no embarrassment at all. The only sufferers will be the strikers and the consumers.

I for one pay all my bills, I pay every month for all the services I use (Tv license, Rates and Taxes, telephone bill, petrol for transport to and from work etc.). I work hard for my money and I expect delivery for what I pay. Why should I have to accept non-delivery for whatever reason and be satisfied for it? Change happens very slowly in this country because everyone in business (or that has the power do anything about) either have their hands tied or are trying to get as much revenue into their pockets for as long as possible before they forced to implement changes. Ever wondered why business in SA focuses 90% on immediate profits / return on investment? Overseas, they've learnt more profit can be generated if long-term strategies are used. We're still short-/ medium-term at best limited. Hence the higher costs and slow penetration rates we have to endure.

I truly hope that I am wrong. I do sympathise with all workers (not just Telkom's) that are paid minimal increases when their company makes enormous profits. This imbalance is what needs to be addressed in general. When the SNO-T starts full operations, are any of you really going to be so concerned with the Telkom employees if the competition does indeed offer better services and better prices? "Shame, we can't leave Telkom, their staff will be retrenched because they won't have enough business .." I don't think so. Look at the bigger picture. As consumers we have rights that historically have been overlooked in SA. This is what I'm supporting - first-and-foremost -> My rights as a Consumer.

Regards.

 

[LifelongGamer]

Erm ... those that want services are not currently getting them from teklom anyway.

Leadership won't be embarrased ? ... erm ... a publicly traded company is extremely succeptible [sp] to strike action. Ask Daimler Chrysler or any large Vehicle manufacturer. The board will make them scapegoats verrry quicky.

Bottom line is that telkom employee's are not a happy bunch and they must do something about that. They have every right to be rewarded for the company's success and must stand up and fight for that right.

During the strike MASSIVE pressure will be placed on govermint to get the issue resulved cos we all know it's their fault that we have this monopolistic situation to begin with. Governmint may just be forced into giving providers greater freedoms.

I stand by my encouragement to strike. Yup it will cost, and it could cost the teklom employee the most, but the potential rewards make it worth it. They must get themselves properly organised.

In order for me to agree with your quoted statement, certain aspects would have to be proven:
1) Telkom gives a rat's behind what anyone, including government think. IMO their action (and lack thereof) over the past 10 years has shown their only concern is their own agenda.
2) Government has had and still have plenty of opportunities to bring reform to the ICT Industry. So far changes are coming down the line, but still looks like the slow pace of 'managed liberalism' will be with us for at least the next 2 to 3 years. Until concrete evidence of truly lower prices, improved service delivery and greater benefit for the consumer is presented, all their efforts are cosmetic and politically motivated to placate the public.

As I've said before, I fully sympathise with the Telkom employees. However, they're not the only ones in this situation. I blame their Unions for not negotiating better on their members behalf. Why should the consumer suffer the inconvenience of lack of service which is being paid for? You claim that

those that want services are not currently getting them from teklom anyway.

But I know of friends that have recently applied for new ADSL lines and within 4 weeks been activated and connected. That means that service is being delivered. Maybe not to everyone in same timely fashion - but if a strike happens all will be affected. Why make the service delivery worse for the consumer?

Then again, I still believe that if Telkom cannot provide a proper product, with proper support and delivery, they should sell their controlling shares in SAT3/SAFE and allow another company the opportunity to try.

At the very least let them come to a compromise! Look at the recent debacle between Telkom and IS - without the compromise of additional bandwidth, IS would not be able to take on new clients. Their situation is far from resolved, but at least progress is being made. Likewise our ADSL woes - progress is being made (slowly) - I don't see the need to hamper this with strike action and negatively impact on the very same people that provides Telkom AND their staff with revenue / salaries in the first place.