Telkom has implemented multiple initiatives to ensure its continued competitiveness. Photo: Supplied.
Telkom has implemented multiple initiatives to ensure its continued competitiveness. Photo: Supplied.

Telkom on a new round of retrenchments

By Dineo Faku Time of article published Sep 17, 2018

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JOHANNESBURG – Telkom, which is partly government-owned, is embarking on a new round of retrenchments.

The company said on Friday that it would offer voluntary separation and voluntary early retirement to qualifying employees.

Telkom has not indicated how many jobs are on the line, but said that it needed to cut costs following new plans by the Independent Communications Authority of South Africa (Icasa) to again bring down call termination rates.

“The cumulative effect of past regulatory decisions has resulted in Telkom subsidies of approximately R70 billion to South African mobile operators. 

"Telkom has implemented multiple initiatives to ensure its continued competitiveness in this context. 

"A primary concern during this process has been to safeguard jobs from market and economic pressures,” Telkom said.

Spokesperson for trade union Solidarity, Johan Botha, said that the union had yet to engage Telkom on formal Section 189 talks.

“Solidarity will, however, have to fight to keep our members employed,” said Botha.

Icasa proposed that fixed termination rates should fall by 70 percent compared with a reduction of only 31 percent in base mobile termination rates.

New regulations

The new regulations are expected to set in from October. 

The regulations followed a review which found that the wholesale call termination market still remains ineffectively competitive.

The regulation includes a glide path period where a charge for terminating a call on mobile and fixed location would be 12 cents and 8c, respectively, from October 2018 to September 2019; 10c and 5c for the period October 2019 to September 2020; and 9c and 3c from October 2020 onwards. 

It also proposed asymmetry for small players and new entrants for the duration of the 3-year glide path.

The asymmetry for mobile services is proposed to be at 5c from October 2018 to September 2020 and 4c from October 2020 onwards.

Asymmetry for fixed services was proposed to be 1c from October 2018 to September 2020 and fall away completely from October 2020 onwards.

Telkom reportedly said last month that this decision penalised it much more than its competitors MTN and Vodacom.

It also previously said that this decision represented a missed opportunity to reduce the cost to communicate for the majority of telecoms users.

“It also disproportionately targets Telkom as the champion in reducing the cost to communicate and the largest employer in the industry. 

"While Telkom employs 18 000 people, the two largest mobile operators together employ 10 000 staff in total,” said Telkom. 

According to Telkom, their operations and structure are very different from that of the other mobile operators. 


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