Labour lashes out at Telkom

By Alex Kayle, Senior portals journalist

Johannesburg, 08 Dec 2008

Trade unions have expressed their resentment of Telkom's decision to sell its 50% stake in Vodacom, with 15% of this going to UK mobile provider Vodafone.

In terms of the deal, penned last month, Telkom's remaining 35% of Vodacom would be unbundled to shareholders, and it is expected that Vodacom will list on the JSE following the completion of the transaction next year.

The Communication Workers Union (CWU) will hold a formal meeting with Telkom this Friday to discuss the deal.

Richard Poulton, CWU sector coordinator, claims the union strongly opposes the sale. This comes after the CWU last week called to have government buy back shares sold by Telkom to Vodafone.

Another voice of dissatisfaction is that of the Solidarity trade union, which claims labour was not consulted before the deal was signed.

Spokesman Jaco Kleynhans says Telkom's decision to sell its stake in Vodacom is not a profitable one, especially during the economic downturn. “Over the long-term, Telkom is losing a profitable business while, in the short-term, it will be gaining capital.”

Short-term profit

Solidarity speculates Telkom's decision was due to the telecommunications giant wanting to generate quick capital to invest in new ventures, such as its expansion plans into the rest of Africa, as well as its plans to increase its level of outsourcing.

Kleynhans adds: “This is a problem, because Telkom is still a traditional landline telecommunications business and we expect that the sale of Vodacom will result in a decline in Telkom's business over the next few years. It will be more difficult now for Telkom to expand in the mobile sector without the 50% stake it had in Vodacom.”

Kleynhans points out that Solidarity has, for the past year, been in negotiations with Telkom demanding transparency regarding its restructuring and outsourcing plans. He adds that Vodacom would have been a great strategic partner for Telkom.

Uncertainty looms

“The deal creates uncertainty among Telkom's workers,” notes Kleynhans. “We want to move the telecommunications industry forward. We want to see changes in the industry happen - Telkom needs to make plans to improve its telecommunications services and offer businesses and households a better price for its services.

“Although Solidarity opposes the decision, we are, however, open to discussions with Telkom, because we believe in the interest of the telecommunications industry and the South African economy, and we are willing to work with Telkom to find a solution and move forward.”

According to Kleynhans, Solidarity has submitted a letter to Telkom requesting a meeting, but - as yet - cannot confirm a specific date.

Jannie Volschenk, deputy general-secretary of the South African Communications Union (SACU), says SACU is in discussions with Telkom.

“We are still investigating the matter. We have not, as yet, unpacked all the details. But once we have done so, we will be submitting a formal statement.”