Papi’s not the prob­lem

Finweek English Edition - - Openers - BY FRIK ELS frike@fin­week.co.za

in­ter­view­ing Papi Molot­sane af­ter he had com­pleted a cou­ple of weeks at his new job. It was at the swanky Mel­rose Arch Ho­tel. My in­ter­view, not Molot­sane’s first for the day, went be­yond the des­ig­nated hour and through lunch. In be­tween the chicken sosaties and sparkling wa­ter he con­tin­ued talk­ing about plans for a nextgen­er­a­tion net­work for Telkom.

He didn’t men­tion the cost that day, but he was vis­i­bly ex­cited about the project. (Later the R30bn set aside to bring Telkom’s net­work up to speed made in­vestors choke on their dis­counted Khulisa shares – still up al­most eight­fold since list­ing.) At the time I thought that just maybe Molot­sane’s ar­rival would sig­nal a change at the mo­nop­oly, al­though he skil­fully and re­peat­edly sidestepped the is­sue of pric­ing.

As many oth­ers who’ve dealt with him have com­mented, Molot­sane is af­fa­ble and open-minded. I’m sorry he won’t see the fruits of his labour. As the say­ing goes: it couldn’t hap­pen to a nicer guy. The mar­ket may still re­gret his part­ing and the jump in the share price af­ter the an­nounce­ment could be short-lived. Shouldn’t in­vestors sup­port a CE of a com­pany that’s “prof­i­teer­ing”? Vir­tual mo­nop­o­lies are a share­holder’s best friend. Just ask Bill Gates. If Gov­ern­ment was in­deed be­hind his de­par­ture – and I’d eat my tele­phone bill if it wasn’t – then it may be sig­nalling the end of mega-prof­its for tele­coms com­pa­nies in SA. Or maybe not. But Molot­sane can’t even be called a fall guy; his fir­ing is merely sym­bolic. Gov­ern­ment – more pre­cisely, the De­part­ment of Com­mu­ni­ca­tions – is re­spon­si­ble for our ter­ri­ble tele­coms sit­u­a­tion. Not Molot­sane.

Re­mem­ber, Telkom’s mo­nop­oly of­fi­cially ended in May 2002. The idea was that a com­peti­tor could just switch on ser­vices at mid­night on 30 April. Five years on, noth­ing. Not that you should buy the idea, put for­ward by Mbeki, that Neo­tel (much less In­fraco) is go­ing to be the saviour of the ripped-off con­sumer. You just need to look at the cell­phone oli­gop­oly and their pric­ing to re­alise that. Not a third op­er­a­tor, num­ber porta­bil­ity or any num­ber of hear­ings by the reg­u­la­tor has budged cell­phone prices.

As for the sup­posed mo­bile-data price war, if you can cut charges by 60% it sim­ply means you’ve been prof­i­teer­ing.

Ivy Mat­sepe-Casaburri’s mis­steps since 1999, when she was ap­pointed Com­mu­ni­ca­tions Min­is­ter, are too many to re­count. The best chance she’s had to change the sta­tus quo came in 2005, when she is­sued a di­rec­tive con­cern­ing value-added net­work providers (the un-Telkom of the in­dus­try). It was sup­posed to bring about a big bang, but Casaburri’s last-minute “clar­i­fi­ca­tion” wa­tered down the pro­vi­sions so much that all it re­ally brought about was cheaper over­seas calls for large com­pa­nies.

Ac­cord­ing to Bri­tain’s reg­u­la­tor, Of­com, the av­er­age Bri­tish house­hold spends 4,6%/ month of dis­pos­able in­come on com­mu­ni­ca­tions. The cost is drop­ping de­spite in­creas­ing use of tele­phone, television and broad­band ser­vices. About 14% of my house­hold in­come is spent on com­mu­ni­ca­tions. And I’m not even a Telkom cus­tomer. The cost of In­ter­net ac­cess is the area where South Africans suf­fer the most: of that 14%, more than half goes on In­ter­net ac­cess that few other surfers in the world would call broad­band.

But don’t worry, Mat­sepe-Casaburri is on to that. She be­gan ap­point­ing a “con­sul­ta­tive com­mit­tee” on broad­band last May. A year later the ap­point­ment process is not yet com­plete. But there’s no rush, is there?

Mis­step­ping

min­is­ter. Ivy Mat­sepe-

Casaburri

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