A recent column penned by retired Vodacom Group CEO Alan Knott-Craig, in which he rallied to the defence of outgoing communications minister Ivy Matsepe-Casaburri, has sparked a wave of protest. What was he thinking?<\/p>\n
In the column, published in Business Day, Knott-Craig wrote that \u201cin our robust democracy we are quick to criticise members of government for failures or weak leadership, but the opposite should also be true\u201d.<\/p>\n
He added: \u201cFor instance, the telecommunications industry has been fortunate to benefit from the light but firm touch of \u2026 Matsepe-Casaburri and her team.\u201d<\/p>\n
Knott-Craig wrote that one of the minister\u2019s most important tasks has been overseeing the promulgation of the Electronic Communications Act, effectively liberalising the industry and introducing more competition.<\/p>\n
DA MP Dene Smuts says she is \u201cextremely puzzled\u201d by the article. \u201cIt was parliament, not the ministry, that wrote competition into the act\u2026 it is parliament\u2019s law, and [the minister] has been frustrating its intention.\u201d<\/p>\n
Others have been harsher in their criticism. \u201cFlatter away, Mr Knott-Craig,\u201d wrote one commentator on FM Tech, a technology news website I edit. \u201cFlatter the minister the industry can\u2019t wait to see the back of, the minister who kept her job because of her servile loyalty to a disgraced ex-president. But please don\u2019t insult the SA consumer and SA business with this feckless whitewash of a disastrous policy from a disastrous ministry.\u201d<\/p>\n
There is no doubt Vodacom benefited from government\u2019s policy of managed liberalisation, which sought to protect operators from competition with the idea that they wouldn\u2019t otherwise invest the billions of rand needed to bring telecom services to the masses.<\/p>\n
There\u2019s no question that Vodacom and its rival, MTN, have extended telecoms to most of the population \u2014 as many as eight in 10 South Africans now own a mobile phone.<\/p>\n
But at what cost? Though prices have come down in recent years in real terms, the cost of communication in SA remains stubbornly high. Vodacom and MTN stand accused of profiting from a system closed to prospective rivals. The minister has actively sought to stop new players from establishing networks.<\/p>\n
Knott-Craig has always professed to welcome competition. The record is less flattering \u2014 one only has to recall that MTN and Vodacom met in London in the early days of the cellular industry to collude on prices; or recall the two companies\u2019 decision to hike call termination rates shortly before Cell C entered the market in a deliberately anticompetitive effort to undermine the new entrant.<\/p>\n
Still, there\u2019s no doubt that Knott-Craig did a good job in his 15 years at the helm of Vodacom, building it from nothing into SA\u2019s market-leading cellular operator.<\/p>\n
I asked Knott-Craig, who now spends his days pursuing his photography hobby, why he penned the Business Day piece. He denies he was defending Matsepe-Casaburri. \u201cRather, it was an attempt to highlight some positives in the telecom industry,\u201d he says. It was intended indirectly to \u201cillustrate how the free market can make things happen without unnecessary interference from government\u201d.<\/p>\n
To be fair, there have been a few positive developments on the minister\u2019s watch \u2014 her recent decision to facilitate Telkom\u2019s disposal of its stake in Vodacom is one of these. But for the most part, she has frustrated development in the sector by taking too long to make decisions, mollycoddling badly run state-owned companies, defending government\u2019s continued shareholding in Telkom, issuing contradictory and confusing policy directives, and slowing liberalisation to a snail\u2019s pace.<\/p>\n
For a self-proclaimed free marketeer and someone who has always professed to want less government interference and greater certainty for investors, Knott-Craig\u2019s column was disingenuous.<\/p>\n