Role on broadband council in the works for Telkom

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The government is in talks with Telkom about taking part in a partnership to boost broadband usage in South Africa, according to Communications Minister Yunus Carrim.

“We are negotiating with Telkom because obviously they have 147 000km of fibre-optic cable,” Carrim said in an interview at the weekend at the World Economic Forum in Davos, Switzerland.

“We need to ensure that we get the most co-operative relationship we can between state-owned companies, the government, publicly listed companies like Telkom and the private sector.”

The government would set up a broadband council within the next 10 days to help develop the proposed partnership between public and private sector entities, which would help to avoid duplication of infrastructure, Carrim said.

Average internet speeds in South Africa lag those of smaller economies, including Martinique and Libya, according to data compiled by netindex.com.

“We recognise that the private sector will only invest in areas where they get sufficient [rates of return],” Carrim said. The state had to take “greater responsibility for under-serviced and rural areas”.

A Telkom spokesman declined to comment.

In an interview last month chief executive Sipho Maseko said the Pretoria-based fixed-line operator might cut its approximately 21 000-strong workforce by 30 percent over five years.

Carrim said the government, which owns about 40 percent of Telkom, would not intervene with the company’s plan to reduce its headcount.

“That’s being negotiated with the trade union,” Carrim said. “It’s not a state-owned company. We can’t intrude or intervene in the way we could with a state-owned company but our understanding is that they are being prudent about managing this process.”

Telkom, which has had five chief executives since 2007, is struggling to revive revenue in a country that has leapfrogged fixed-line technology in favour of smartphones and other mobile devices that are driving a boom in data use across Africa. – Bloomberg


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