[DEBATE] : Vodacom megascam

[Patrick Bond]

David Everatt wrote:
> Would be interesting to know if people are deliberately disconnecting 
> because cell-phone providers are so much cheaper. We've certainly been 
> picking that up quite a lot here in Gauteng, across rich and poor - 
> just as the tender has been awarded to include broadband cabling with 
> every new telephone line Telkom provides. 

Here's what I riffed about the ultracommodification of phone calls in 
the 2nd edn (2005) of Elite Transition:

Since 1997, when a 30% share in the state-owned Telkom was sold to a 
Houston/Kuala Lumpur alliance, numerous problems arose:
- for fixed-line telecommunications, the cost of local calls skyrocketed 
as cross-subsidisation from long-distance (especially international) 
calls was phased out;
- as a result, out of 2.6 million new lines installed, at least 2.1 
million disconnections occurred, due to unaffordability;
- 20,000 Telkom workers were fired, leading to ongoing labour strife;
- a second fixed-line operator was first discouraged then encouraged 
under pressure from competing commercial interests, and a regulator 
(with integrity) was ultimately dropped from the selection process;
- attempts to cap fixed-line monopoly pricing by the regulator were 
rejected by the Texan/Malaysian equity partners via both a court 
challenge and a serious threat to sell their Telkom shares in 2002;
- Telkom’s 2003 Initial Public Offering on the New York Stock Exchange 
raised only $500 million, with an estimated $5 billion of Pretoria’s own 
funding of Telkom’s late 1990s capital expansion lost in the process;
- a collusion pact on pricing and services exists between the two main 
private cellular operators; and
- persistent allegations of corruption stymied the introduction of a 
third cellular operator.