Telkom is a Ponzi scheme


“Telkom”, as defined by the satirical Uncyclopedia website in 2006, “is the South African word for Satan, although this is a very loose translation since Telkom would kick Satan’s ass. Telkom is just the baddest, meanest, ugliest corporation in all the world. It makes Exxon, Apple, and George Doublya Bush look like Mother Teresa”.
This pretty much sums up the feeling most South Africans have about Telkom, which last week reported what everyone already knows: its profits are down, its business is stagnant and it’s pretty clueless about how to proceed in this new world in which data transmission is the biggest thing happening.
This, amazingly, is a monopoly with the entire country sewn up and which is able to deliver broadband better than anyone else – but hasn’t. Revenue is retreating from voice calls but growing in data. Telkom is the Mugabe regime of telecoms: Bob stole an election and still managed to lose it.
Telkom’s solution: launch the country’s fourth cellular operator. (Sorry, Virgin Mobile, guess you don’t count – certainly not with Telkom-quality service).
This is for Telkom group chief executive Reuben September specifically: I beg you, please don’t do it. You don’t answer the phone calls that your call centre does, or get the e-mails I do about Telkom’s bad services and overpriced fixed-line service.
You have no idea how bad it is in the trenches. Clearly, the anguished cries of a nation whose neck you’ve been standing on for a decade and a half don’t reach the ivory towers in Pretoria plastered with that gaudy neon advertising.
Is no one else worried about Telkom entering the cellphone market? A whole new meaning to “dropped calls” will descend on us all. What a wunch of bankers.
Just by the way, Reuben: I really don’t take offence that Telkom no longer invites me to launches or press functions, or even results announcements. I really don’t. I know Telkom doesn’t like me. Frankly, it’s mutual. Not even the Competition Commission, or the Supreme Court of Appeal, like you.
Telkom deserves a perverse prize for pouring good money after bad, but unfortunately that honour goes to the SABC. Only last week the corporation managed to get R1.5-billion out of the government after showing that, for years, it has employed only the dimmest minds in management. Sadly, there are no fraud charges or dismissals. It’s a good job in the parastatals, if you can get it. Just ask Eskom.
While we’re talking about results, let me just say that I feel for you. I think you, Reuben, and Pinky Moholi are two business people who deserve recognition for your pioneering roles in South Africa. Both of you have amazing life stories, being among the first black electrical engineers, and fighting your way to the top.
Why is it, then, that two stellar people have presided over such a disaster that, to paraphrase the legendary Douglas Adams, Telkom “will be the first people up against the wall when the revolution comes”.
Here’s my problem: For years Telkom told us that the biggest cost involved in broadband provision was the costly international undersea cables. That was why we paid twice for our ADSL line rentals and were capped at only 3GB. Then, amazingly, the veil slipped.
I played a small part in this big mess. Earlier this year, at Internet Solutions’ annual Internetix conference, I repeatedly asked Moholi, who is MD of Telkom SA, when broadband prices would be reduced, now that Seacom has arrived and Telkom has upgraded its own undersea cable.
She sidestepped deftly, but another panellist let the cat out of the bag by revealing that the international leg was only 20% to 25% of the overall broadband costs.
Telkom’s either been lying to us or has managed to reduce these costs to a quarter of the overall fees and has pocketed the difference.
I wouldn’t be able to tell you – they don’t invite me to their functions – but either way, they’re as bad as a Ponzi scheme.

* This column originally appeared in The Times on 29 November 2009.


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