TELKOM boss Sipho Maseko says the time had come for the telecoms - TopicsExpress

TELKOM boss Sipho Maseko says the time had come for the telecoms group to stop subsidising private cellphone operators through iniquitous termination rates. Since taking office in April, Mr Maseko has led the charge to win the hearts and minds of South Africans. It won’t be easy for the little-loved “Hellkom” to shake off its image as a rude and inefficient bully, but Mr Maseko sounds confident. Mr Maseko said on Friday the multifaceted plan — insiders are calling it Blue Wave — will involve cutting costs, improving customer service and providing blisteringly fast fibreoptic data connections. But he was adamant that the termination rate discrepancy needed to be addressed. “We are in the water with [Olympic champion] Michael Phelps and we’ve got to swim with lead irons on our legs,” he said. Termination rates are the costs paid by operator A from which a call is made to operator B on the other end of the line. Cellular termination rates are currently 40c, but if a call is made from a mobile number to a Telkom number, Telkom can only charge 12c. Mr Maseko said this meant Telkom had paid out in the region of R60bn over the past seven years to cellular companies, while getting a pittance in return. “It’s been through Telkom subsidies that companies like Vodacom and MTN have been able to grow internationally,” Mr Maseko said. They had unfairly benefited and the “unjust” relationship needed to change — Icasa needed to enable Telkom to charge more and compel cellular companies to charge less. One core driver of the Blue Wave would be the fibreoptic network. As well as providing data speeds of up to 40 megabits a second, fibreoptic cabling can be used for voice calls, which will ultimately make copper cabling unnecessary. Savings would be substantial in the long run, Mr Maseko said. One benefit is that fibre won’t be stolen as it has no value in itself. That will cut maintenance costs. Faults can often be diagnosed and fixed remotely as well, so there will be less need for technicians to be sent to tinker on lines while customers fume in their homes and offices. Telkom is ahead of the fibreoptic game. Of South Africa’s 160,000km network, Telkom owns 145000km. The focus would be to lay down more and to complete the “last mile” from the network into homes and offices. High-density, high-use areas would get priority, he said, but there would also be an intensified programme to get data to more schools and clinics, and ensure some form of connectivity to the more rural areas. Mr Maseko acknowledged that Telkom service had often been “woeful”, but said fewer things were likely to go wrong with a fibreoptic network. It followed that less interaction with call-centre staff would be needed. With luck, call-centre operators would be more efficient too. Mr Maseko said ground-breaking labour agreements had been reached not just in terms of a three-year pay freeze but also in terms of productivity guidelines. The “problem child”, Telkom Mobile — formerly known as 8ta — is still squandering the fortunes of its unwieldy parent. But Mr Maseko said there were plans afoot to “de-risk” it and make it less capital intensive. He was adamant it wouldn’t be sold or shut down, but it was going to have what he intriguingly called “a different model”. He said the plan would be unveiled at Telkom’s results in November. Telkom Mobile was the only unprofitable wing of Telkom, Mr Maseko said. The group was turning a profit of over R6bn to R7bn, which would be used to power the Blue Wave of improvement.