Telkom Initiatives to Address Underdevelopment: briefing

LABOUR AND PUBLIC ENTERPRISES SELECT COMMITTEE
25 August 2004
TELKOM INITIATIVES TO ADDRESS UNDERDEVELOPMENT: BRIEFING

Chairperson: Ms N Ntwanambi (ANC)

Documents handed out:
Telkom Presentation

SUMMARY
The Telkom delegation's presentation was followed by various questions from the Committee, generally congratulatory, but especially querying the current job-losses within Telkom and Telkom's commitment to rural development.

MINUTES

Telkom submission
The head of the Telkom delegation, Mr N Kekana, handed over to the CEO, Mr S Nxasana who presented the briefing. He highlighted:
- The importance of ICT's (Information and Communications Technologies) to developing economies.
- Telkom's increasing expansion into domains previously overshadowed by IT-companies.
- The importance Telkom placed on Black Economic Empowerment (BEE).
- The impact of listing on Telkom.
- Telkom's Center for Learning.
- Learnership programmes in partnership with the Information Systems, Electronics and Telecommunication Technology Sector Education Training Authority (ISETT SETA)
- Telkom's employment equity programme
- The current job losses - emphasising that these are indicative of technological change rather than economic trouble.
- Telkom's HIV/AIDS programme, to be fully operational by November 2004
- The Telkom Foundation

Discussion
The Chair questioned the focus by Telkom on tertiary-level bursaries. She asked what kind of programmes were in place at secondary school level, especially as pertained to female learners. She also queried the very low amounts spent by ISETT SETA.

Ms C Mokoena (Telkom Managing Executive: Centre for Learning) answered that bursaries were available from Grade 10 onwards, and that there was a special focus on girl learners. Girls in tertiary-level bridging programmes within the Sciences were especially supported. She continued that although Telkom was ISETT SETA's biggest contributor, she could not account for their budget. Telkom especially encouraged females in business through the Telkom Foundation's sponsorship of the "Take a girl-child to work" Day (which included follow-up and mentorship programmes) and the "Women in Leadership" Programme, run in conjunction with Peninsula Technikon.

Mr D Mkono (ANC) asked what the delegation felt about the timing of the current job losses, especially following so closely on the President's very hopeful State of the Nation Address. He asked if the Committee could be provided with a point-by-point response for the public.

Mr Nxasana responded that there was never an appropriate time for job losses, but that it should be stressed that the current developments could be traced back to 2002. He delineated recent interaction with the unions involved (specifically Solidarity), who had gone public with figures for job losses which had originally been meant only as a figure for jobs affected in the future. He stressed that recent events had unfolded in unfortunate and unplanned manners and said that the Committee was welcome to Telkom's briefing notes regarding their position with the unions, which had been made available to all MP's.

Ms J Terblanche (DA) congratulated Telkom, specifically in the areas of education and HIV/AIDS, but then asked what the costs of accommodation for the recent delegation to the Athens 2004 Olympics had been. The CEO answered that he could not give an exact amount, since this was included in the larger budget for such events, but that Ms Terblanche was welcome to obtain more details regarding the budget directly from Telkom.

Ms S Cheng (DA) queried the links between the Company and the Department of Trade and Industry (DTI). Mr Nxasana explained that Telkom worked closely with DTI in the training of staff, especially with regards to call-centre learnerships. He added that many of Telkom's displaced staff had transferred to Telkom's suppliers (such as Siemens).

Mr D Gamede (ANC) first asked the CEO to expand what it meant when Telkom was described as "state owned". To this the CEO replied that at present, institutions own 46% of Telkom, though this could by November be up to 61%. 39% is at present government-owned. Mr Kekana added that regardless of shareholders, Telkom was still considered an organ of state.

Mr Gamede went on to query the follow up to the popular "Molo Mhlobo Wam" project, especially its impact in the rural areas. Mr S McKenzie (Telkom: Chief Operating Officer) answered that it was continuing as part of various licensing programmes. In the rural areas, there was a lack of a "cash-culture", with people preferring and being able to buy only small portions of a product, bit by bit. This meant the rural areas were much more suited to cellular expansion. Vodacom, of which Telkom owns half, was expanding rapidly in these areas. Telkom was however also supplying satellite services for wealthy rural South Africa.
Mr Kekana added that programmes were in place in rural schools, in agreement with the Department of Communications, and that from January 2005 Internet calls and subscription would be charged at 50% of current cost for all public schools as well as for Institutions of Further Education and Training (E-rates) as set out in the Telecommunications Act.

Thirdly Mr Gamede asked Telkom to elaborate on the physically disabled schools they were supporting and requested figures for physically disabled people in Telkom management. Ms N Vokwana (Telkom Foundation: Chief Executive Officer) replied that Telkom, in accordance with White Paper 6, supported 30 special schools, three in each province, as well as an additional three (further details were available upon request). Each school was supplied with 20 computers, a printer, a server, subsidised access to the Internet and three years' assistance. This costs Telkom roughly R1 million per school.

Mr Gamede lastly asked why all Telkom vehicles were registered in the Eastern Cape, wherever they were being driven. To this the CEO responded that since 2001, the entire Telkom fleet had been outsourced to Daimler-Chrysler, who is based in the Eastern Cape. Hence Telkom owned none of the vehicles with the Telkom logo.

Mr Kolweni said that since Telkom was still regarded as government-affiliated, special efforts should be made and incentives offered in the rural areas to encourage people to stay there. He said that high tariffs (especially Sentech tariffs) were hampering development. Ms Cheng agreed that although Vodacom was expanding aggressively in rural areas, its services were also very expensive which was hampering availability. Mr Nxasana responded that Sentech and Telkom tariffs were all regulated by ICASA.

Mr Gumede questioned Telkom's position on the analogue-digital debate. Mr Nxasana answered that Telkom had gone from being 73% to 99,8% digital since 1997. This had been a key consideration for FIFA when evaluating the 2010 World Cup bid. In the 0,2% of areas still analogue, conversion to digital was not cost-effective, and in those areas alternative solutions were still being explored.

The Chair asked if the Committee could be provided with exact details of the Telkom learnership programmes and the CEO answered that these focus areas of support would be listed in the Annual Report to be released shortly.

Ms Ntwanambi jokingly referred to the support Telkom affords golf, which she felt was not reflective of the sport's popularity in the townships. She further questioned Telkom's support of philharmonic orchestras in Johannesburg, Cape Town and Durban, and asked how this compared to their support of choirs, which she felt were more broadly popular. The CEO answered that the support Telkom gave orchestras was usually much smaller than that afforded choral music. Telkom tended to support specific orchestral events, whereas choral support was continuous. Together with Old Mutual, Telkom supported the National Choir Festival, which ran throughout the year in the various provinces, culminating on a national level.

Lastly Ms Ntwanambi asked the delegation for direct results of Telkom's efforts to minimise job losses. She was referred to the section of the PowerPoint presentation detailing forceful retrenchments. The CEO outlined the 12-month plan during which employees were given training to prepare them for other jobs within Telkom or outside, if they so chose. He stressed that many employees transferred to companies supported by Telkom (such as suppliers).

Mr Nxasana lastly repeated, in connection with the question of rural development, Telkom's "edu-rate" for Internet access for public schools and institutions of further education and training , which would come into effect from January 2005. He stressed that in some instances electrification was however a more pressing concern. He reiterated that in certain under-serviced rural areas, networks were helping increase levels of tele-density and said that further details would be available in the forthcoming annual report.

The meeting was adjourned.