Telkom’s monopoly costs SA economy R 50-Billion

Telkom’s monopoly cost the local economy at least R 50-Billion over the last few years according to a leading economist.

Speaking on Kyknet’s ‘Wat’s die Storie’, Efficient chief economist Dawie Roodt said that the lack of competition and Telkom’s monopolistic behavior in the telecoms arena over the last five years cost the economy at least R 50-Billion Rand in lost growth.

Roodt further said that the delays in the licensing and launching of the SNO were not only to the detriment of the economy, but will make it very tough for Neotel to compete effectively against Telkom.

Not only was the economic climate far more favourable for telecoms investment back in 2001/2002 when the SNO should have become operational, but the delays also gave Telkom a great opportunity to firmly establish a stranglehold on most areas of telecoms service delivery.

According to Roodt it will be very tough to break this stranglehold, and he expressed doubt as to whether Neotel will be up to the task.

Roodt however does not directly blame Telkom for the very expensive services and low service levels in the fixed line telecoms arena, but rather places the blame at the feet of politicians who ‘think they know better’.

Roodt pointed out that Telkom simply did what many other companies will do, namely misuse their status as a monopoly to bring higher profits and more value to its shareholders. Its major shareholder, incidentally, is the Government itself who gave Telkom’s its monopoly status.

Roodt advocates the establishment of a competitive, free telecoms environment where market forces will dictate services and prices. Currently this heavily regulated industry is basically at the mercy of the Department of Communications and ICASA.

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Telkom’s monopoly costs SA economy R 50-Billion