Papi’s not the problem
He didn’t mention the cost that day, but he was visibly excited about the project. (Later the R30bn set aside to bring Telkom’s network up to speed made investors choke on their discounted Khulisa shares – still up almost eightfold since listing.) At the time I thought that just maybe Molotsane’s arrival would signal a change at the monopoly, although he skilfully and repeatedly sidestepped the issue of pricing.
As many others who’ve dealt with him have commented, Molotsane is affable and open-minded. I’m sorry he won’t see the fruits of his labour. As the saying goes: it couldn’t happen to a nicer guy. The market may still regret his parting and the jump in the share price after the announcement could be short-lived. Shouldn’t investors support a CE of a company that’s "profiteering"?
Virtual monopolies are a shareholder’s best friend. Just ask Bill Gates. If Government was indeed behind his departure – and I’d eat my telephone bill if it wasn’t – then it may be signalling the end of mega-profits for telecoms companies in SA. Or maybe not. But Molotsane can’t even be called a fall guy; his firing is merely symbolic. Government – more precisely, the Department of Communications – is responsible for our terrible telecoms situation. Not Molotsane.
Remember, Telkom’s monopoly officially ended in May 2002. The idea was that a competitor could just switch on services at midnight on 30 April. Five years on, nothing. Not that you should buy the idea, put forward by Mbeki, that Neotel (much less Infraco) is going to be the saviour of the ripped-off consumer. You just need to look at the cellphone oligopoly and their pricing to realise that. Not a third operator, number portability or any number of hearings by the regulator has budged cellphone prices.
As for the supposed mobile-data price war, if you can cut charges by 60% it simply means you’ve been profiteering.
Ivy Matsepe-Casaburri‘s missteps since 1999, when she was appointed Communications Minister, are too many to recount. The best chance she’s had to change the status quo came in 2005, when she issued a directive concerning value-added network providers (the un-Telkom of the industry). It was supposed to bring about a big bang, but Casaburri’s last-minute "clarification" watered down the provisions so much that all it really brought about was cheaper overseas calls for large companies.
According to Britain’s regulator, Ofcom, the average British household spends 4,6%/month of disposable income on communications. The cost is dropping despite increasing use of telephone, television and broadband services. About 14% of my household income is spent on communications. And I’m not even a Telkom customer. The cost of Internet access is the area where South Africans suffer the most: of that 14%, more than half goes on Internet access that few other surfers in the world would call broadband.
But don’t worry, Matsepe-Casaburri is on to that. She began appointing a "consultative committee" on broadband last May. A year later the appointment process is not yet complete. But there’s no rush, is there?
Finweek
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