Competition needed, not a cop-out
Every day, I drive past the clearest sign of Telkom’s problems.
For the past six months, a new mini-shopping centre has been under construction on my way to the office. A stretch of the park has been reclaimed, including the corner that was home to a Telkom exchange box for a road.
Now, right in the middle of this new road is this Telkom box — on its concrete block, blocking the newly tarred road.
Should I liken it to the information superhighway, as the Internet was quaintly known in its early days, or does anyone in government get the picture about what is wrong at Big Tee?
This is a telecoms company that can’t answer its own call centre complaints lines.
Hands up anyone who has had satisfactory service from Telkom in their last three encounters? In the past five years?
The country buzzed with excitement last week amid all the talk of MTN buying Telkom. There is no doubt Telkom needs a radical change, but will it serve the country for Telkom to be sold.
The problems with South Africa’s overpriced telecoms are more fundamentally rooted in the lack of policy, the lack of political will and the lack of gumption to do something about it.
What we need is a regulator with teeth, more funding and real power to censure industry players, like the UK’s Ofcom.
The inherent problem, as I hope I showed last week about the undersea broadband cable fiasco, is that no one in government has any common sense.
Sure, any government should be concerned about the running of strategic asset like Telkom, but governments the world over have privatised telecoms utilities and with enormous success — when it’s tied to a strong regulator. It’s not like we’ve had stellar service, cheap prices and reason to blow the national pride vuvuzela have we?
From a market perspective, it’s questionable if such a key company will do anything else but exploit the monopoly it already has. The state- sanctioned, state-protected, state- turns-a-blind-eye monopoly.
The ra-ra that has greeted MTN’s possible purchase is a symptom of the anger and frustration with Telkom, and to my mind, not necessarily the best solution to South Africa’s dire telecoms problems.
It’s not as if MTN has fallen over itself to give us cheaper cellphone calls, has it?
Telkom doesn’t need a new owner, it needs strident competition. The market needs a real watchdog regulator.
There are also questions about the other parties in this divorce/marriage pantomime.
In Europe, mobile call revenues are declining on average by 10percent a year, something Vodafone chief executive Arun Sarin said two years ago they needed to counter with other revenue sources like data. Hands up anyone who thinks if Vodafone buys all of Vodacom we’ll see declining call costs? Anyone?
I could grow old calling for Communications Minister Ivy Matsepe- Casaburri’s head, despite her mistakes getting increasingly Manto- esque (sorry Dali — but I haven’t called her a thief yet).
I’m going to say this slowly, so that cabinet ministers can take it in: The market is a very good way of regulating itself when there is competition — when the policy framework doesn’t protect incumbents with state-sanctioned incompetence and over pricing.
Sounds too complicated? Okay, slower: One company that provides a service no one else is legally allowed to, nor has the licence to, can charge consumers whatever it wants because there is no competition.
Do I need to speak any slower?
The thing about common sense, the truism goes, is that it isn’t very common. Especially not in government.
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