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'Chaotic, incoherent': Telkom CEO slams Mboweni’s growth plan

Sep 02 2019 13:34
Compiled by Lameez Omarjee

In an opinion piece, Telkom Group CEO Sipho Maseko has slammed Treasury's proposed reforms for the ICT sector, particularly plans related to the rollout of spectrum, as being "ill-thought-out".

Maseko authored a column for the Sunday Times, which he used to accuse Treasury of putting forward plans for the sector which do not seem to be aligned with that of the Department of Communications policies.

Last week, Treasury released a surprise economic policy discussion paper which seeks to boost growth to 3% and create over one million jobs.

The 77-page document included proposals to speed up of the auction of spectrum, to reintroduce a law to cut down on red tape, to simplify onerous visa regulations, and for Eskom to consider selling coal-fired power stations.

The public have until September 15, 2019 to make submissions on the paper. Following engagement with other stakeholders, it will be handed to Cabinet for further adjustments, Treasury Director General Dondo Mogajane previously said.

Mogajane also said Treasury had engaged extensively with other ministers and director generals of departments for input on the document.

But Maseko accused Treasury  of paying little attention to existing government policies in drawing up the paper.

"Both inclusivity and policy certainty are imperilled by a document that suggests the Treasury is either not aware of or wilfully disregards government policies already adopted in other departments.

"It does not speak well of the government, nor our ability as a country to attract and retain investment, if the Treasury issues policy position papers that gainsay a government policy adopted only a month ago," he wrote.

He suggested that Treasury's reforms for the ICT sector fly in the face of Minister of Communications and Digital Technologies Stella Ndabeni-Abrahams' gazetted policy on high demand spectrum and policy direction on the licencing of a wireless open access network (WOAN).

While Treasury proposed that government release spectrum through an auction with "a small set-aside for a government-controlled network", Maseko's gripe is that the department's policy direction indicates the WOAN should not be government-controlled. "That is only the beginning of the paper's incoherent, ill-thought-out and ultimately chaotic intervention in the area of telecoms and ICT," he wrote.

The department's policy indicates that the WOAN should be owned by a consortium of persons, at least 70% of which are South Africans. Further to the diversity of ownership, targeted groups should include youth, women and persons with disabilities. The WOAN may include public entities as shareholders.

"It boggles the mind that the Treasury paper, published on August 27, reads as if the authors had never had sight of the July 26 government gazette on spectrum," Maseko asserted.

He suggested that if Treasury got telecoms and ICT "so wrong", it raises questions on the proposals made for other sectors.

Maseko added that the policy uncertainty would negatively impact future investment, by Telkom specifically. "As a business, Telkom cannot comfortably invest in the future of SA when policies that affect our planning may be withdrawn or reintroduced at any time. That principle applies across companies and sectors," he wrote.

Outdated document

Maseko also criticised Treasury for dealing with outdated concepts such as the copper network. "[This] suggests the authors are not at all familiar with the current state of the ICT market or the technologies driving it," he wrote.

Founder of World Wide Worx and tech analyst Arthur Goldstuck shared Maseko's views that the paper was outdated when it comes to telecommunications reforms. 

"It reads like a historic document rather than a current document," Goldstuck told Fin24.

He explained that Treasury makes reference to "local loop unbundling" which "no one talks about anymore, it's become so irrelevant". Local loop unbundling gives companies access to Telkom's local copper wire infrastructure. But Telkom itself is retiring its copper network, Goldstuck said.

But he believes Treasury's proposals will not have a big impact on the sector, and that the department of communication's policy direction would have a greater bearing because of its relevance.

Treasury has not yet responded to Fin24's request for comment.

Read the original article in the Sunday Times here.

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