Altron has won a major court victory against Telkom and its subsidiary BCX in a tiff about the telecommunications company’s controversial black economic empowerment (BEE) status.
Rob Davies, minister of trade and industry in 2019, declared Telkom as a BEE Facilitator.
The BEE legislation makes provision for organs of state to be declared BEE Facilitators, and the effect is that such an organ of state will then be regarded as 100% black-owned, even if it is not.
Altron and other businesses objected to this on the basis that Telkom, and more specifically, BCX, will obtain an uncompetitive edge over private businesses that compete with it if the application succeeds.
In spite of the objections, Davies approved the application and granted Telkom BEE Facilitator status at the beginning of May 2019.
Strangely, although Telkom brought the application, the final decision of the minister reads that the BEE Facilitator status is granted to government, represented by the Office of the Presidency, in respect of government’s 40.5% shareholding in Telkom.
Altron was of the view that the minister’s decision was flawed, both from a procedural and substantive perspective, and it decided to take the minister’s decision on review to the High Court.
MTN joined Altron in the application, with the minister, Telkom and BCX opposing the application.
Chris Potgieter, Altron group executive for legal, following the ruling: “Altron took a decision to take this matter on review because we believe that the minister’s decision to grant the BEE Facilitator status was procedurally and substantively wrong and was contrary to the spirit of the BEE Codes.
“The result of the BEE Facilitator status approval was that Telkom and its BCX subsidiary obtained an unfair advantage over their business competitors through the resultant increase in Telkom’s and especially BCX’s BEE levels, without them having to take the corporate actions and having to incur the costs which other companies have to do in order to improve their BEE status.”
According to Potgieter, MTN joined Altron in the review application and Vodacom was mentioned as it, as a telco, had a vested interest in the matter.
“Altron welcomes the judgment as it shows that government is bound to follow fair and correct procedures and it takes away the unfair competitive advantage that Telkom and BCX obtained,” he says.
Meanwhile, Telkom tells ITWeb: “In compliance with the decision by the Gauteng High Court to set aside the minister of trade and industry’s decision to grant facilitator status to the government in respect of the government shares in Telkom SA, Telkom and certain of its subsidiaries have included the impact of the judgment in their revised B-BBEE certificates.”
Where required, it says, other subsidiaries have applied for re-verification of existing certificates.
“Telkom is pleased that the court’s decision will not be implemented retrospectively. In setting aside the minister’s decision, the court said the ruling will not affect the B-BBEE status of Telkom and its subsidiaries for the purposes of any tender or contract awarded and/or concluded after 7 May 2019 and before the judgment date (8 July 2020).”
According to Telkom, tenders and contracts concluded during this period will retain the facilitator status until the end of the terms of these contracts.
According to a recent MyBroadband article, Telkom has fallen victim to the group behind the Sodinokibi ransomware, also known as REvil.
The group has claimed responsibility for the attack and has threatened to leak the Telkom client database on its the Dark Web blog.
The REvil / Sodinokibi group is one of several ransomware operators that steals sensitive data from victims and leaks it on the dark web if their targets don’t give in to their extortion demands.
The group has recruited a team of affiliates who carry out attacks on corporate networks.
According to speculation, the group may have tried to extort $1-million out of Telkom.
The company denied that its systems had been infected with ransomware.
Staff working remotely were unable to connect to servers or the Telkom virtual private network.
Telkom has announced that it has reduced costs on its retrenchment exercise by R300-million due to the nationwide lockdown.
- The restructuring process has been reduced from R1.5-billion to almost R1.2-billion
- According to an ITWeb article, “preserving cash and maintaining a flexible balance has become of utmost importance and urgent during the COVID-19 pandemic as the economy is under strain”
- In January, Telkom announced 3 000 jobs will be cut
- In 2019, Telkom said it cut over 2 000 jobs in 2018 and reduced permanent staff by 12.5%
- Telkom yesterday revealed it will not be able to finalise annual results on time
- Telkom said it is in agreement with the government on its efforts to fight COVID-19 and also supports government initiatives to curb the spread of the virus.
By Jay Caboz for Business Insider SA
Network service provider Openserve, the telecommunications infrastructure company that handles the backbone of Telkom’s network, has confirmed a fault currently impacting voice services, especially calls to some call centres.
The most affected are smart customer call centre numbers in the 086 range, which are dropping calls nationwide.
The fault is affecting multiple businesses from emergency rescue service through to call centres at Discovery.
“Voice services have been largely impacted since 07h00 this morning with intermittent call termination failures,” said the company in a statement.
“Openserve confirms that its high-level support personnel are currently engaging with its vendor technical support teams to isolate and resolve a fault that is currently impacting voice services.”
The company has apologised to all those affected and said it had escalated the matter as a high priority.
The most affected appear to be smart call centres lines that make use of 086 numbers, which are dropping calls nationwide.
These are mostly the toll -free numbers, as well as other Telkom landline operations businesses use, reported MyBroadband.
One emergency line has also been affected, that of the Divers Alert Network or DAN South Africa.
“Please note that our call centres are affected by a Telkom network issue in South Africa. We are working to resolve this as soon as possible. Please use +27 82 810 6010 or firstname.lastname@example.org to contact the DAN hotline for dive safety advice or an emergency. For the DAN admin office use +27 71 476 1138 or email@example.com”, it states on its website.
The fault mostly affects call centres used by the likes of banks and insurance companies. Some are now providing alternative numbers to use.
- Telkom – WhatsApp or SMS 081 160 1700, or DM over social media
- SAhomeLoans – 031 576 5858
- Discovery Bank – 011 324 4000
- Discovery Health, Life, Invest and Bank – 011 539 6006
- OUTsurance – firstname.lastname@example.org
- 1Life insurance – 010 493 9007
- Hollard – 011 351 4669
- Investec – DM over social media
- CapeTownCycleTour- email@example.com
- Virgin Active – 021 684 3002
- African Bank – DM over social media
- Bidvest- 011 407 3103
- Standard Bank – Lost & Stolen cards 011 299 4114; Transactional banking 011 299 4701; Home Loans 011 299 4600; Vehicle Asset Finance 011 299 4747
By Sibongile Khumalo for Fin24
Telkom has issued a notice to cut as many as 3 000 jobs – nearly a third of its workforce – across multiple departments, as the company looks to streamline its operations amid falling earnings and changing market conditions.
Trade union Solidarity, which is one of the unions representing workers, said a notice of the process – which would be conducted in two phases – was received on Wednesday.
“We expected the retrenchments to happens but not in such large numbers. This is quite a large number… we did not expect it,” said Linda Senekal, the union’s sector coordinator.
She said affected workers include those employed in the IT department, customer services and small business.
With a 9 000-strong workforce, Telkom is adjusting to a shift in operating conditions, which have seen a significant move from voice to data.
The semi-privatised company, which operates in several countries in Africa, has also faced calls by Independent Communications Authority of South Africa to drop data costs.
Senekal voiced concern that the company had opted to lay off workers instead of opting to upskill employees for tech-driven jobs.
“Telkom employs a lot of contractors to do jobs that should be done by its workforce,” Senekal said.
The company’s interim financial results, released in November, showed that headline earnings dived 36%, while net debt increased by almost R2bn to R11.8bn.
Telkom is among several large organisations considering job cuts as the country battles high unemployment rates and tough economic conditions.
Last year, debt-stricken national airline, SAA, announced plans to reduce head counts, in a move which was fiercely opposed by unions.
This week, MassMart, which owns Game, DionWired and Makro, among others, announced on Monday that it was consulting with its employees about the potential closure of 34 stores. The move could affect up to 1 440 employees.
Telkom’s recently released results show that fixed-line broadband subscribers – which include ADSL, VDSL, and fibre-to-the-home customers – declined from 974 181 in September 2018 to 781 255 in September 2019.
This means Telkom lost 192 926 fixed broadband subscribers over the last year, which equates to a 19.8% decline in its customer base.
However, the struggling telco has offered to buy Cell C and combine South Africa’s two smallest mobile network operators to better compete against larger rivals.
The bid includes a plan to reduce Cell C’s debt and renegotiate contracts with suppliers, the people said, asking not to be identified because negotiations are ongoing. Telkom wants to take over the management of Cell C’s business.
The approach comes as Cell C explores options with MTN and local investors known as the Buffett Consortium to recapitalise the company, which may include the sale of some of its assets. The two offers will be considered side-by-side as Cell C and its owners try to restructure R9-billion of debt.
This comes after Telkom recently announced that it will become the first national telecommunications operator in South Africa to switch off its legacy 2G network.
The company will terminate 2G services in March 2020, according to CEO Sipho Maseko.
The company has about 250 000 2G-only users left on its network, out of a total subscriber base of 11..5-million, as most have migrated from 2G to 3G.
According to a recent article by MyBroadband, a frustrated property owner switched off a Telkom cellphone tower after the mobile network failed to pay him for electricity and rental.
- The tower sits on a commercial property in Glenhazel, Johannesburg
- Telkom and the owner reached an agreement to mount a base station on the building, allowing it to provide improved coverage in the area
- Telkom was to reimburse the owner for the cost of the electricity required to run the site
- Telkom also agreed to pay a monthly rental amount
- Initially bills were paid on time, but then payments became sporadic
- Telkom paid less than the agreed upon amount, or not at all
- Calls and e-mails to Telkom went unanswered
- The landlord warned Telkom that if he did not receive payment by a certain date, he would switch the tower off
- He received no reply and switched the tower off
- This has resulted in reduced coverage for local residents who are Telkom mobile or fixed-LTE customers
A recent article by MyBroadband explored how the popularity of VoIP services like WhatsApp has impacted voice income for South African major mobile networks: Vodacom, MTN, Telkom and Cell C.
- Vodacom has experienced a “slight decrease in the consumption of traditional voice minutes”, but said the advantages of traditional GSM calls still make it a good option for consumers.
- MTN told MyBroadband that it has “experienced a decrease in traditional calls and an increase in VoIP usage to match”.
- Cell C admitted they had noticed a decrease in the amount of traditional call minutes being used, but said that it had stabilised.
- Telkom told MyBroadband that it had “not seen a decrease in the average minutes of use per user for both on and off-network calling”.
However, according to We are Social, “WhatsApp is the biggest messaging app … in South Africa. We have 38-million unique mobile users, which grew by two million between 2017 and 2018. ”
The high costs of data in South Africa prevent many users from using WhatsApp’s full capabilities.
Telkom has informed its customers that it will be migrating them to fibre and wireless services soon, as it will no longer support copper-based voice and DSL services.
- ADSL and VDSL customers will be migrated to capped and uncapped fibre packages
- DSL users will be migrated to fixed-LTE products if no fibre is available
- Cable theft and inclement weather will no longer impact DSL subscribers, so they can therefore expect better service levels and less downtime
- This will impact ISPs which have thousands of ADSL subscribers
- These subscribers can be moved onto other broadband solutions, which are better products
- The move will likely make Telkom more competitive
According to a recent MyBroadband article, Telkom is rapidly losing ADSL and fixed-line subscribers across South Africa.
The company once had aspirations to be the leading fixed-broadband provider in the country, but current figures show this is not the case:
- Telkom’s fixed-line subscribers stand at 2 267 000, the lowest since 1994
- Telkom’s ADSL, VDSL, and fibre subscribers declined from 981 176 to 847 650 in the last year
- There has been a 13.6% decline in fixed-broadband subscribers
- Independent fibre network operators (FNOs) are rolling out fibre networks faster than Telkom can
- Companies like Vumatel offer a wide range of pricing – from free for a 4Mbps line to R1,299 for a 1Gbps connection
- Vumatel’s partnership model rapidly gained momentum in South Africa, putting Telkom on the back foot
- The rush to get fibre rolled out across SA lead to a land-grab and pricing cuts, leaving Telkom on the sidelines
- Telkom is too big and too slow to respond quickly
- Today Telkom’s fibre-to-the-home market share is below 40%
- Telkom has significantly cut its fibre-to-the-home investment over the last year, decreasing the capital expenditure in its fibre network from R2.112 billion in its 2017/2018 financial year, to R1.216 billion in its 2018/2019 financial year