Is the bottom line going to ruin our future?

Saturday, 6 July 1996

I don't envy Jay Naidoo's job, but right now, I wish I were doing it...

TECHNOLOGY is wonderful. I'm sitting in a dormitory room at the Harvard Business School, with a Natal Newspapers Apple Macintosh laptop plugged into the university's computer network, and Reuter news service feeds me up to the minute news from home.

South African officials started a whirlwind tour of Europe, America and Asia this week to find an equity partner for Telkom, the state utility at the forefront of the government's privatisation drive, Reuter told me.

One key bargaining chip for Naidoo will be the length of market exclusivity granted to Telkom by the government. Naidoo has already freed up his negotiating position by removing any reference to deregulation of the industry and Telkom's dominant position under draft telecoms legislation.

"Some discretion is given to me as the minister and this exclusivity is very important in the way we negotiate with our potential partners," Naidoo told parliament last month. "It could mean the difference between a large amount of money and no money."

There are lots of sound business reasons as to why postponing deregulation of telecommunications is shortsighted.

I discussed some of these earlier this year after getting first hand experience of the Finnish telephone system, which has given that country the highest number of Internet users per capita in the world.

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But Naidoo has to wear two hats -- that of minister of telecommunications, and that of former secretary-general of Cosatu. And conflict of interest time has arrived.

Should he be looking at the long term interests of our country, or should he be looking at the interests of the possibly tens of thousands of unionised Telkom workers who will lose their jobs if the industry is deregulated?

I'm not in the same camp as those in our business community who would like to see deregulation in order to cut their own telecommunications expenditure.

The more money one has, the easier it is to afford technology that allows bypassing of Telkom's ridiculously high tariffs. Businesses are already doing this by piggybacking voice traffic over wide area computer networks.

And if Telkom tries to cut down on this practice by cranking up the price of computer data lines, private satellite networks will become a viable option.

It's the final cost of communication to private consumers that's the issue for me. I want to see every household in South Africa able to make unlimited local calls for one low monthly fee. Why?

Three years ago in Sardinia, I and a few other researchers at the Centre for Advanced Studies, Research, and Development, put together a project we called Mirtonet (named after the island's ubiquitous myrtle berries).

The aim of the project was to allow school pupils to access the resources of the Internet by allowing them to piggyback on unused business network capacity after hours.

Now translate such a program to this country three years later when both PCs and modems have fallen in price, and more companies than ever have full time Internet connections that lie idle at night.

Let's look at the state of education in this country. We're now laying off teachers at a time when we most desperately need to be ramping up on the quality of education to prepare us for the challenges of a competitive world under GATT.

We can't afford to keep teacher/pupil ratios at the artificially high levels enjoyed by white schools under apartheid. But we can work towards a future where every school pupil has access to a networked home computer.

Textbooks can then be stored electronically, all but eliminating that expense from the education budget. A wealth of science, mathematics, and literature is already available free on the Internet, and growing in volume by the minute.

We need cheap accessible telephone services to make this happen.

It's a tough call for Jay Naidoo, Dikgang Moseneke, Brian Clark, and others on the team who are trying to find equity partners to buy a piece of Telkom for 10 billion rand.

But those partners are going to come in for a return on their investment. Not the long term development of South Africa's telecommunication industry. Not for developing the minds of our children.

They will be looking for the quickest way to get back their 10 billion rand.

And that's not going to be earned from new phone connections in our townships.