Telkom CEO vows to fight ‘unfair’ LLU
Sipho Maseko warns that other companies want to “ride on Telkom’s network” instead of investing their own money in building infrastructure. By Duncan McLeod.
Telkom group CEO Sipho Maseko has vowed to fight local-loop unbundling (LLU), saying the telecommunications operator’s shareholders shouldn’t be “prejudiced unfairly” by “subsidising” competitors that don’t want to invest in their own infrastructure.
“Telkom has been trampled on for quite a while,” Maseko said in response to a question from TechCentral at a press conference following the company’s 2013 annual general meeting. “LLU, I think, is a half-told story. My view is that as a principle we should encourage investment, especially in the local loop.”
Maseko said that Telkom has investment significantly in the local loop – the infrastructure that connects businesses and retail consumers to its core network – and it is therefore “a bit unfair that no one wants to invest in the industry and instead look to Telkom to subsidise” them.
He added that Telkom continues to invest in maintaining and supporting the local loop. “It a bit disingenuous [for other companies] to agitate to say, ‘I don’t want to put in my money and invest, but I want to ride on Telkom’s network’.”
Maseko used the example of South African Breweries, which provides branded fridges to shebeens. He said that it’s like another brewer expecting to be allowed to store its beers in those fridges.
He said Telkom is “not being aggressive” in fighting LLU, but rather “confidently asserting” its rights. “We have shareholders and we don’t believe our shareholders should be prejudiced unfairly. Our shareholders expect us to represent the company as best we can … and give them a return from their investment.
“Philosophically, we encourage investment. It’s not right that once again Telkom is being seen as the firm to lean on to get an easy ride into the market. People need to invest.”
Similarly, Maseko wants a change in call termination rates, which he said unfairly discriminate against Telkom in favour of the mobile operators. Termination rates are the fees operators charge each other to carry calls between their networks.
He said that it was correct for the mobile operators to enjoy a favourable termination rate that disfavoured Telkom – then a monopoly – when they were launched. But that should have ended in 2000.
“The subsidy has continued, which is very unjust,” he said. “There is an accumulated value of a 10-year subsidy that Telkom has paid, which needs to be sorted out.” — (c) 2013 NewsCentral Media