Cosatu opposes proposed Telkom/ Koreal Telecom deal

The Congress of South African Trade Unions has condemned the proposed R4,6bn deal between Telkom and the Korean Telecom (KT) Corporation.

The condemnation followed news that Telkom and KT were in talks which could see KT acquire 20% of the local telecom giant.

“This is a further backward step towards the total privatisation of Telkom which the federation has consistently opposed,” said Cosatu in a statement.

“The RDP pointed to the important economic benefits of ensuring basic telephony for all South African households. The results of commercialising Telkom, however, have been – as in most countries that privatise telecommunications – increasing costs for poor users and lower costs for business and the rich, relatively slow improvement in access and job losses”.

Cosatu revisited its 10 year old observation on commercialisation of Telkom. “In the past three years (from 2001), we have seen the loss of 17 000 jobs just in Telkom. That is almost a third of the company`s total employment. In these three years, Telkom, by itself, accounted for over 2% per cent of job losses outside the public service”.

Ten years later, Telkom is still trying to cut jobs, though disguising this process as offers of ‘Voluntary Severance Packages’, which the Communications Workers Union (CWU) is rightly discouraging workers from taking, “as a matter of principle”.

The CWU’s opposition, “is based on the premise that Telkom being a state parastatal, cannot be allowed to embarrass our government by acting contrary to pronouncements by the Polokwane National Conference of the ANC, the January 8th statement as delivered by the President of the ANC, Cde Jacob Zuma, and the recently held ANC Lekgotla around the issue of Decent Work and Job Creation.”

Also in 2001, the federation commented that “the restructuring of Telkom has been associated with declining services for the majority of our people. According to the government`s own statistics, in the October Household Survey, in 1999 less than a third of African urban households and less than one in ten African rural households had telephones, compared to over 80% of rural and urban whites. The level of telephone connections in African areas had fallen since the previous year.

“Soaring rental charges for telephones place them beyond the reach of at least a third of our people. At the same time, the increase in local telephone charges makes telecommunications increasingly inaccessible. Local charges rose 35% even after inflation in the past two years. At the same time, we saw a 40% fall in the cost of international phone calls, which mostly benefit business and the rich.

“We should not be surprised at this kind of results from privatisation… After all, private companies must seek to maximise their profits. No matter what the broader social gains would be, they can`t afford simply to give services to the poor. After all, no men or women open a business to meet challenges of poverty, unemployment and or to provide services to the people. All these are accidentals in pursuit of profit by companies.”

Cosatu added that Telkom stands out as an example of what can go wrong in privatisation. They have reversed all the gains they previously made as a public entity and the poor have gained nothing out of this process. Privatisation in Telkom has followed the classic path: worse services for the poor, high job losses, and improvements only for business and the rich.


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