Telkom pushes back outsourcing project

Fixed-line operator Telkom has agreed to defer the implementation of its “capability management” project until April 2009, with the signing of a memorandum of understanding with various labour unions.

A Telkom spokesman said this morning that the move to defer the implementation was a mutual decision, following consultation with the Communication Workers Union, the South African Communications Union and Solidarity.

The project is essentially a strategy to outsource up to 90% of the fixed-line utility's operations, that would affect 19 000 employees and save the company an estimated R1.3 billion a year.

While the implementation of the outsourcing deal has been pushed back, the spokesman says the project remains on track. Telkom earlier assured labour organisations that employability of Telkom staff is a “major objective of this process”. As such, potential managed services partners will be required to ensure continued employment at levels equal or better than what Telkom offers currently.

However, several industry and labour representatives have expressed concern about the pace of the project, feeling Telkom is rushing to complete the outsourcing deal. Initially, the deadline was set for an August implementation.

Telkom says it has heeded the call to slow down, referring to comments made by CEO Reuben September to the company's employees.

“The capability management project has progressed well since the Organised Labour Business Interface Summit, in late 2007, and the process unfolded thus far has maintained engagement with organised labour at a strategic level. Due to the enormity of capability management, the introduction of these measures will assist to ensure we accomplish the best possible results.

“There is an onus on all role players, be it management or organised labour, to ensure with absolute certainty that every facet of the process is successfully planned and implemented,“ September states.

To this end, Telkom and the unions that represent its employees have agreed to extended timelines that will allow further in-depth scrutiny. In addition, the parties will be able to delve deeper into issues that fall within the scope of capability management, the company says in a statement.

According to Telkom, the “best possible results”, as mentioned by September, specifically refer to ensuring job security and other concerns raised by labour.

Meanwhile, Solidarity spokesman Jaco Kleynhans says the union welcomes the decision. “We asked that they must take their time and ensure that workers are looked after.”

Kleynhans says the union has already embarked on a process to up-skill members, many of whom have long-standing experience, but little or no formal qualifications.

“We are facilitating training courses for our members to ensure they remain employable. The deferment will at least give us time to complete this process,” he explains.

Solidarity, says Kleynhans, does support the outsourcing project, as it recognises the changes in the telecoms sector and sees that Telkom, as well as SA, have fallen behind. “We need more specialisation in the sector, so we do support the move. But it must be done in a way that will not harm workers.”

He states that negotiations around job security, post the implementation of the capability management project, are still ongoing.

“There is no formal agreement in place at this stage, but we are hoping to conclude something soon,” he adds.

While Telkom has refused to officially confirm or deny which companies are pitching for the outsourcing deal, sources have revealed that Ericsson, Nokia Siemens Networks, Alcatel-Lucent and Cisco Systems have shown interest in the network operational outsource process. Accenture, Unisys, TechMahindra, HP and Amdocs are said to be interested in information operations.

Sources also claim the outsourcing deal has been extended to seven years and could be worth an estimated R10 billion.