Well here's a suprise. Yet ANOTHER company refusing to invest in South
Africa due to Telkom's insane pricing. According to stats from the DTI
in 2003, at least 32 international companies have withdrawn their
investment from SA because of telecoms costs. Some reports say at least
100 000 call center
jobs (which would lift 1 million South Africans out of abject poverty)
have never materialised because, despite an otherwise excellent
environment, Telkom's costs are simply too high.
In
a protest we held at Rosebank mall about 18 months ago, we met a chap
who was doing
research on behalf of the Japanese government. His job was to see
whether the Japanese government should invest in South Africa. He
had to go back to them and tell them that due to our absurb telcoms
prices, Japan should NOT invest in South Africa. They took his advice.
Telkom
seems intent on destroying the South African economy. Please read more in this article by the
Business Day.
REUTERS, the media and
information provider that is one of the 100 largest companies listed on
the London Stock Exchange, says Telkom’s continued high
telecommunications prices and low-quality bandwidth are deterring it
from ploughing more money into SA.
The
statement from Glocer, in an interview during a brief stop in SA, will
add to the pressure on government to inject new energy into sluggish
efforts to promote telecommunications competition to avoid missing out
on foreign investment.This
also underlines recent research from economist and telecoms consultant
Paul Cole, which showed that local consumers were paying 440 times more
than they should for voice and data calls.Glocer
said that while Reuters had extensive business interests in Africa and
was attracted to SA’s sophisticated financial markets, telecoms
services “are far more expensive here, and the available bandwidth is
flaky”.Glocer
said if this issue was addressed, it would precipitate far greater
investment from Reuters in SA. He said the high cost of
telecommunications was an issue that “has to be solved if SA wants to
create an economy that is growing”.Reuters
does not disclose separate investment details of its South African
business, but it employs about 100 people in SA and last year
experienced 15% growth in revenue across Africa.Glocer
said that while SA had many advantages over other emerging markets,
including its stronger infrastructure, a well-run economy and
sophisticated financial markets, the telecommunications costs remained
a glaring weakness.Telkom
has denied its costs are prohibitive and yesterday it reiterated that
it was “committed to the process of consistently adjusting its pricing
model in order to make telecommunications more affordable and
accessible to business as well as the broader South African public”.But
Glocer said that unlike in the rest of the world, SA’s telecoms costs
for running Reuters’ products and information terminals dwarfed the
cost of the product itself.“Where
the communication line is more expensive than the product itself, this
makes the service prohibitive. Here, certain services are beyond the
price point of the buyer,” he said.Compounding
the problem, Glocer said, was that the quality of bandwidth Telkom was
able to offer did not measure up to that in certain other emerging
markets.He said call centre jobs that could have been SA’s had already been lost because of this.Glocer’s comments add to complaints from other groups.Last
year, the South Africa Contact Centre Community told Parliament that SA
could potentially lose 100000 new call centre jobs because of high
telecoms costs, as global call centre companies chose to operate in
countries where costs were lower, such as India and the Philippines.Eighteen
months ago, international telecommunications group AT&T said it did
not plan to increase its South African investment because of high
costs, primarily in telecommunications.AT&T said that while it used Telkom for 2% of its local business, this represented 25% of its total business costs in SA.President Thabo Mbeki has also repeatedly highlighted the high costs of telecoms in SA.Reuters chairman Niall FitzGerald is a member of Mbeki’s International Investment Advisory Council.Source: http://www.mybroadband.co.za/nephp/?m=show&id=5381
