COSATU has consistently argued for the continued public ownership of basic service providers, so that they can deliver more accessible and affordable services, especially to poorer communities. The federation has opposed the privatisation of Telkom because it will force it to put profit before service delivery and the poor will be the victims.

The Telkom statement admits that 'an inability to pay' is one of the reasons for the high level of disconnections. Even though Telkom is rolling out new phones, basic rentals and local call costs have been going up. Between 1998 and 2001, the price of local calls increased in real terms by around 35 per cent. In contrast, the price of domestic long- distance and international calls became cheaper by 40 per cent. In addition, basic rental costs are high, at over R60 a month.

These increases for local calls and basic rentals have pushed telephones beyond the reach of most South Africans. The high level of disconnections occurs largely because users cannot pay. Thus, in the year to March 2001, Telkom provided 620 000 new connections ? and 220 000 lines were terminated. Even before Telkom?s privatisation has been completed, the pressure to become commercially profitable has led it to effectively sideline the working class and the poor. The very people who most need telephones are being deprived of them. Telkom's priority has become to be 'competitive'. To achieve this it is concentrating on the market of the wealthy, who benefit from cheaper long-distance and international calls, at the expense of the poor, who mainly make local calls and are thus subsiding the rich. The regulatory body ICASA condemned the latest tariff increases as unjustified, but Telkom want to usurp ICASA?s authority to determine a fair level of tariffs. Deregulation will make the situation even worse, as the second telecommunications operator will also be forced to be ?competitive? by chasing the market of those who can pay for international calls and sophisticated services, rather than on the provision of new lines to poor communities. Telephones are a necessity in the modern, industrialised world. They help to empower individuals and communities by giving them access to emergency services, businesses and community organisations. They are also a vital tool for finding employment or establishing a business. All these advantages benefit not only the individual who gets the phone but also the wider community, whose economy grows as a result.

Yet among the African population, less than a third of urban households and less than 8 per cent of rural households have access to telephones, compared to over 85 per cent of white households in both types of region. Despite Telkom?s commendable efforts to extend its network, overall South Africa has lagged behind in new connections. Between 1995 and 1999, the middle-income countries as a group increased connections per 1000 inhabitants by 60 per cent, while in South Africa they rose by 30 per cent. In 1995, South Africa had about 65 per cent more than the average for middle-income countries; by 1999, it had dropped to the average. The loss of jobs associated with privatisation is another concern for COSATU. Over the last four years Telkom has lost at least 17 000 jobs, around a third of its total labour force. In short, privatisation in telecommunications has followed the classic path of worse services for the poor, high job losses, and improvements only for formal business and the rich.

COSATU reiterates its opposition to the privatisation of Telkom and demands that the government compels them to deliver a better and more affordable service to all South Africans, poor as well as rich.

Patrick Craven and Moloto Mothapo, Acting COSATU Spokespersons
082-821-7456