Three Telkom unions accused the telephone monopoly on Tuesday of undermining the government's mandate to create jobs and fight poverty by threatening to retrench workers and charging excessive call rates.
The unions say they refused to believe that the company - 37,8 percent owned by the state - was following "the mandate of government" as claimed by Telkom's management.
Dirk Hermann, speaking on behalf of Solidarity, the Communication Workers Union and the South African Communications Union, said if this was so, the company would be creating more jobs instead of reducing its workforce by 7 600 people in the next three years.
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Hermann said the unions and the company were "locked in a battle of ideas".
| 'The best way to make money for its shareholders was to fire staff' |
Telkom seemingly believed the best way to make money for its shareholders was to fire staff. The unions thought a better approach was to improve and expand services.
Referring to last week's announcement of the belated coming of a rival for the landline monopoly, Hermann said Telkom could not hope to tackle the second network operator by just cutting costs.
He was also concerned about the apparent "shareholder fundamentalism" of Telkom's management. "This idea is embodied in Telkom's previous annual report and in particular in the wording of the company's strategic aim: 'To increase shareholder value by increasing profit and cash flow.' By contrast, the trade unions want an approach that takes all stakeholders into account."
He said these included the company's staff and clients.
Hermann said Telkom's premise was that technological progress and process changes made it possible to render the same service with fewer people.
| 'Poor South Africans can afford to have a phone - but cannot use it' |
"The trade unions feel that this is a reactive argument. Technology is allowed to dictate business strategy. We believe technological progress will enable Telkom to do more with the same number of staff," Hermann said.
Dawie Roodt, chief economist of Efficient Group, presented a report to journalists showing that Telkom retarded national economic growth through its high call charges and business model.
Roodt postulated that if Telkom increased its rates by the world average, instead of much more than that, interest rates as well as inflation would have been one percent lower than they were today. Economic growth would have been 0,06 percent higher a year and about 67 000 jobs could have been created.
Roodt also showed two approaches to charging callers: that used in the United States where local calls are often free but are offset by high connection and subscription costs, and Telkom's.
Telkom charged connection and subscription fees below the international average.
As a result, many poor South Africans can afford to have a phone - but cannot use it.
This is why only 600 000 of the 2,85 million lines the company has rolled out in recent years are still in operation.
In South Africa telephone costs become higher the more one uses the utility, while in the US they become cheaper - thereby encouraging use and keeping bad debts down.
Hermann said the report was not an exercise in Telkom-bashing, but brimmed with "positive business ideas" such as:
Reduce prices, particularly call charges;
Offer innovative access options, like those used by the cellular networks;
Reconnect the 2,1 million disconnected lines;
Roll out "broadband" access for internet and other users;
Retrain existing staff to take over outsourced work; and
Limit employee reduction to natural attrition only.
The report was handed to Telkom on Saturday.
A 60-day consultation period for the unions and the company to find alternatives to retrenchments ends on Monday.
Union negotiators said yesterday indications were that Telkom would ignore the "sound" business proposals the study contained.
Telkom said it noted "with interest the suggestion in the report that the company should further reduce its labour expenses by about R1,2-billion".
The company's Amanda Singleton said the unions' suggestion that Telkom could save jobs by growing the business rather than cutting expenses incorrectly assumed that growth areas in the telecommunication industry were as labour intensive as those in which redundancies were taking place.
She said Telkom took great care in the design and implementation of alternatives to retrenchments.
- This article was originally published on page 5 of Daily News on September 08, 2004
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