Press Statement dated 25 August 2018
The Federation of Unions of South Africa (FEDUSA) has called on the Independent Communications Authority of South Africa (ICASA) to review drastic proposals on call termination rates as these threaten 10 000 jobs at Telkom according to the telecommunications parastatal’s CEO Sipho Maseko. Termination rates refer to fees that telecommunication companies charge each other for carrying calls across their networks. ICASA is proposing drastic cuts in these rates.
Reacting to ICASA’s bombshell announcement on Thursday, Maseko suggested in an interview with TechCentral that the proposed termination call rates seemed single out Telkom for harsh treatment compared to the soft pedalling on Vodacom and MTN.
“ICASA’s mandate is to promote competition in this sector by addressing market failure and thereby reducing the cost to communicate. But their decision does the opposite,” Maseko said in the interview
“Telkom has been the aggressive challenger in the market. We have invested in the network, we’ve reduced prices, we have offered dramatic improvements in value for money for customers. Telkom is the primary agitator in the market, bringing down the cost to communicate for South Africans. Despite this, the call termination rate decision hits Telkom much harder than the other mobile network operators”.
Maseko pointed out that ICASA’s proposals to cut fixed call termination rates by 70 percent compared to a cut of only 31 percent in mobile termination rates punished Telkom and end users rather than Vodacom and MTN.
Telkom employed about 18 000 workers compared to about 10 000 at MTN and Vodacom combined yet the proposals were disproportionately targets the biggest employer in the sector, concluded Maseko.
Over the last three years Telkom has gone through mass restructuring to compete with the likes of MTN and Vodacom with strategies of outsourcing and retrenchments who now stand on plus minus 12 000 employees from 18 000. To retrench a further 10 000 workers will have a negative impact on socio economic growth and add to South Africa high unemployment rate.
Issued by Frank Nxumalo, Media and Research Officer, Federation of Unions of South Africa (Fedusa)