Telkom offering employees voluntary separation and early retirement packages

Telkom will start offering employees voluntary separation packages from this week.

The company told MyBroadband that it will offer voluntary separation and voluntary early retirement packages to qualifying employees from Friday, 14 September.

“The cumulative effect of past regulatory decisions has resulted in Telkom subsidies of approximately R70 billion to South Africa mobile operators,” said Telkom.

“Telkom has implemented multiple initiatives to ensure its continued competitiveness in this context. A primary concern during this process has been to safeguard jobs from market and economic pressures.”

“We continue to engage with the regulator on the impact of these historic decisions.”

Regulation

The move comes after Telkom CEO Sipho Maseko recently stated that ICASA’s decision to reduce fixed termination rates would lead to big job losses at Telkom.

“The call termination rate proposal would hit us much harder than our competitors,” said Maseko at the time.

“ICASA is proposing that fixed termination rates (FTRs) should fall by 70% compared with a reduction of only 31% in base mobile termination rates (MTRs), and that MTR asymmetry which supports new entrants should be reduced,” said Maseko.

He went on to state that the proposed FTRs require cost reductions that are “not feasible within a three-year time frame without significant job losses”.

Maseko said Telkom would engage ICASA on the proposed regulations.

Following the statement, a source informed MyBroadband at the start of September that Telkom was considering offering voluntary severance packages to employees.

Telkom stated that no decision had been made on the possible move at the time.

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Telkom offering employees voluntary separation and early retirement packages