Dear Gamos
I think we can cut the crud and face up to the truth that Telkom is a crappy company, which is a relic from Apartheid that needs some sorting out. I think if you are a South African you have earned the right to bemoan Telkom in whichever way you feel comfortable (as long as it eases your pain and suffering). Like morphine to a person who just lost a limb with no medical care for miles around. Who cares if morphine (moaning) is addictive when you are in that amount of pain! I guess the response will be “**** you give me the shot *******!” in a loud and quite serious voice…
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From Sunday Times (Note this guy is not and idiot)
'Telkom putting a brake on the economy . . .'
A visiting international telecoms specialist and Telkom go head-to-head on telecommunications policy and practice
By Clive Emdon
Marginalised : Poor are suffering, says Professor William Melody
Visiting expert takes Telkom to task for 'stifling' SA economy
Is Telkom a burden on the economy? Yes, says a visiting telecoms specialist from Canada, Professor William Melody.
Melody says Telkom is still a monopoly and has prevented the information and communications technology and telecoms sector from developing. He says Telkom's tariffs are outrageous.
But Nat Kekane, Telkom's group executive for regulatory and public policy and former chairperson of the Parliamentary Telecommunications Portfolio Committee, dis agrees.
He says SA would not have the depth and breadth of telecoms infrastructure without Telkom's dedication over six years and capital investment of R48-billion.
This was to boost the capacity and functionality of an ageing network that needed considerable modernisation, rehabilitation (in the form of digitisation) and mass expansion.
Click on this link to view a graphic Comparison between current tariffs and 2004 tariffs
Related links
- 'Not so - we've given voice to most South Africa
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Telkom's monopoly restrictions are a brake on the whole economy, preventing the use of an enormous stock of existing telecommunications network facilities, says visiting international telecoms specialist Professor William Melody.
He says in addition to Telkom's network, Sentech, Eskom and Transtel all have large telecom facility networks spread across the country that are highly under-utilised because of restrictions that protect Telkom's monopoly and the delays in licensing its competition.
Melody says: "Telkom's profits are outrageous in the light of their having withdrawn services [due to fraud and unaffordability] from two million of the 2.5-million they had undertaken to roll out services to under their licence obligations.
"Telkom is getting rid of its marginal customers, the poor, and is not providing universal access as it claims to be."
Further, it has increased its tariffs by 26% a year for the five years from 1997, with the price of a three-minute call rising from 31c to R1.11 by 2002.
Melody says a year ago Telkom had an overall price increase of 9.5%.
In fact, it could or should have reduced its tariffs by 10% to 15% in terms of efficiency gains it made by its own account in each of the past two years.
Melody says South Africa's small, vigorous and independent VANS (value-added network services) and Internet sector are severely restricted by obsolete government policies, severely limiting development of e-commerce, e-government and other information society services.
An example of restrictions are those against the supply of integrated voice and data services that penalise a burgeoning sector of new and exciting technologies that need to be freed up.
Melody says a historic problem is that public utilities providing electricity, transport, telephones and water supply each have their own fiefdoms.
These have always been described as "natural monopolies" because of the capital requirements to establish and maintain them.
Electricity and transport built their own telecommunications network, often with huge capacity required to manage their own grids.
They did not, however, plan to network with one another.
Telkom's monopoly means nobody but Telkom may provide voice services to the public or voice and data together.
Liberalisation would mean these networks could lease capacity to telecoms competitors and service providers such as the VANS industry, which would then be free to communicate voice over Internet protocol services.
Melody says that in the Netherlands, British Telecoms provides the management for the second operator, which uses the Dutch Railways system.
Eskom is allowed to use only its network for the control and management of electricity flows and may not use it for its administration or customer service.
"The history of countries setting up their telecommunications systems is very similar.
"The question is at what speed do they free up the system to benefit the economy. In Denmark, one of the best-regulated telecoms systems in the world, for example, you don't need a licence. You find out who has the capacity, you lease the service, and start your business."
One problem is that for the SNO (second network operator) or underserviced area licensees to get a licence in South Africa, they are required to provide more facilities.
"Government dictates 'facilities for services', while Eskom and Transtel and Sentech could use their facilities but are still under restrictions. For example, Eskom through the SNO will be able to connect people up to their broadband fibre optic network, while Transtel has an extensive VSAT network in Africa (very small aperture terminal - a satellite-based communications system using dish antennas as small as 90cm).
Melody says it is similar to the system of the manufacturer, wholesaler, retailer where government allows competition among manufacturers but controls the wholesalers and retailers to protect more manufacturing.
"This is mercantilism, not development. It's generating monopoly profits for government and Telkom."
Melody says lifting restrictions in the sector would increase the volume of service five to 10 times. Fibre optics with new software can provide 10 times the services it could as little as three years ago.
"The fundamental issue of principle is that most of the new technologies are devoted to getting more services out of existing infrastructure, and not to adding more amounts of physical structure. It's adding to existing capacity."
He cites how Sentech and Transtel have their own networks that go to places Telkom cannot go, and thus have vast under-utilised capacities.
Melody says unknown to most of us is the fact that the largest network in the country is the national lottery. It has exemptions to lease capacity from others but may not provide a voice signal. In other words, if a payphone were allowed at each lottery point, greater voice penetration would be achieved in South Africa.
Instead, Telkom's monopoly causes a slowdown in new applications of technology to keep control over the sector and to maintain high profits.
"Telkom's profits are outrageous, especially in the light of their losing two million of the 2.5-million line connections they were required to make under their licence. After going to the expense of putting lines into people's homes you don't switch them off. You at least allow them to receive calls. This costs Telkom nothing. Instead, it could earn from incoming calls and allow emergency calls to me made."
He agrees that a portion of the 2-million lost connections would have changed to mobile telephony but adds: "Pre-paid mobile costs lots more than fixed line - it's four or five times as high."
He says that at this stage Telkom does not have to upgrade its infrastructure.
"If they eliminated the restrictions on VANS and Internet service providers, these would sell information services and become Telkom's marketing department, passing on 50% of their income. There's an undersold market out there. ISPs give 70% of their income to Telkom. British Telecom makes more money through service providers than it does selling its communication service."
He suggests that US company SBC, Telkom's strategic equity partner, which has management control, would want to make the company as profitable as possible before selling off its shares. "None of this helps South African economic development".
Melody is a visiting Canadian professor at the Link Centre, Graduate School of Public and Development Management, University of the Witwatersrand
He who does not understand the value of war at the right time, cannot comprehend the value of life at any time - Anonymous
] Power to the people
]