In this virtual meeting, the Portfolio Committee met to engage on Telkom's progress report in response to the petition launched by a group of Independent Field Technicians (IFTs) SMMEs based on their experience working with Telkom.
The Telkom delegation indicated that they have a mechanism in place specifically to address this matter and so far it has been a success. However, it would like to be given more time to continue trying to resolve the remaining issues.
Members said the bullying of small companies by Telkom has caused economic trauma and there must be consequences for that. It is not taking responsibility for what it has done to small businesses. Members said Telkom has not done enough to assist marginalised groups and uplift the township economy.
The Committee agreed to give Telkom more time to resolve the remaining matters. There was an agreement to have ongoing engagements with Telkom, other SOEs and the private sector on the systemic concern of how to empower SMMEs that Members had raised. The Committee will hold a separate meeting with the IFT companies to gain insight and obtain concrete facts and evidence. The SMMEs were encouraged to continue engaging with Telkom to find an amicable solution but if there is no solution they would report this to the Committee.
The Chairperson reminded the Committee of the 16 February and 30 March meetings they had with the petitioners and Telkom. The Committee's approach will be to listen to Telkom’s progress report. Petitioners have been invited to the meeting to observe the proceedings so they can see for themselves that the Committee is taking this matter seriously. The Chairperson welcomed the Telkom leadership and said she was eager to hear their responses. The Committee support team will then check Telkom’s responses in line with the petition. She thanked Telkom for having responded positively and being present at the meeting.
Telkom OpenServe progress report
Dr Siyabonga Mahlangu, Telkom Group Executive: Regulatory Affairs and Government Relations, introduced his team which deals with IFT matters as well as different arms of the state. He assured the Committee that they constituted a committee known as the Supplier Compliance Management Council (SCMC) as an escalation channel to process the complaints received by the Committee from the IFTs. This council consists of different professionals who sit together and deal with these matters on an individual basis. Six of the 11 matters have already been resolved, proving that the mechanism they put in place is working. He pleaded that Telkom be given another chance to give an update on the remaining five IFTs about the progress or hiccups they may have. The established council is outside of the normal Telkom structures, established specifically to resolve such supplier disputes. He invited the SCMC chairperson to present on behalf of Telkom
Mr Shawn Botes, Chief Regional Officer at Openserve, outlined the six individual matters that have been resolved. He then responded in detail to the eight questions that had been raised by Members in the previous meeting (see presentation).
Mr M Hendricks (Al Jama-ah) thanked Telkom for the generous way they have responded to the petition. It is concerning, however, that petition had to be made in the first place. The petition covers a long period in which people tried everything in their power to have these matters resolved, but their grievances were never listened to. There must be consequences for Telkom for harming and hampering small businesses, something which goes against its own mandate. Without that harm, those small businesses would have thrived and become bigger competitive companies, but Telkom undermined and destroyed them. Telkom has nothing to be proud of in light of the concerns raised in the petition. They are only responding generously because they realise they have been oppressive to small businesses – so their track record is not impressive. Had that generosity and professionalism existed four to five years ago, huge progress would have been made in the small business sector. Telkom must double its efforts by going into townships and identifying young people who are educated and knowledgeable, engaging with them at a local level and identifying ways it can help them. It will be paying for its indiscretions.
Mr D Mthenjane (EFF) thought the Telkom presentation was more about telling the Committee what they do instead of addressing the issues raised in the petition. This is not what the Committee want to hear. They fail to take responsibility for what went wrong or commit to doing better in future; they are simply doing marketing. Do they take responsibility for bullying small businesses? Why did they bully them? What is the way forward from here to address this? They have failed to do what was expected of them, hence there is a complaint.
Mr F Jacobs (ANC), while appreciating Telkom’s feedback, agreed with other Members that this was still not enough. Telkom is one of the country’s big state-owned enterprises, in the same league as Eskom and all the other big SOEs. For this reason, it has the responsibility to partake in government’s vision of shared and inclusive economic growth. Rather than giving opportunities to big greedy businesses and the Black elite, it needs to work with the township and informal economy and ensure that marginalised groups are afforded similar economic opportunities. Telkom has failed in doing this.
There is also economic trauma here. Does Telkom understand that the Committee is simply trying to do right by the people? It is trying to ensure that government policies are implemented and that opportunities are shared with the poor, not with those who are politically connected, greedy and tenderpreneurs. It is not enough that only six of those IFT concerns have been dealt with after five years. The history and the trauma that those small businesses have gone through also mean this collective has failed them.
The Committee previously asked for the profile of the people covered and if the townships are covered, but the response was vague. Of those 43 townships connected to fibre, how many of those internet service providers are township based? Is there someone from Mitchell’s Plain from whom local people are buying internet services? All the Committee can do is invite Telkom back for the second round of responses. The Committee should also invite all state-owned enterprises, including other big companies, to come and unpack their local procurement.
The Chairperson pointed out that this was a complex matter because it came to the Committee as a petition and the Telkom delegation came to give responses specifically on the petition. It is good that Committee members are raising serious structural and systemic concerns that Telkom must attend to, but it is equally important to remember that this was a specific response by Telkom to the petition. The Committee engagement should focus on the responses to the petition for now.
The Committee needs to wait for a second round. In the second round, they will find the Committee ready with a package detailing what needs to happen. A lot of important points raised by Committee members need to be formalised. The Committee needs to deal with these points formally. Committee members have burning issues which go beyond the ones raised in the petition and which must all be attended to.
Dr Mahlangu replied that with those successes made in this matter as outlined in the presentation, Telkom believes it will be able to resolve the issues raised by Members. While acknowledging the genuine concerns raised by the IFTs, it is important to remember that Telkom is governed by laws and the PFMA, so it is important that the solution to the challenges does not indirectly harm Telkom. They ask for space to properly address all these matters with facts and evidence. The delegation is not here to admit liability to Telkom. Admitting liability would be an invitation of risk to Telkom. He is unable to respond to the questions about bullying and liability because that requires facts and admitting this in public may subject Telkom to legal issues in court. Telkom commits to helping the SMMEs as it has tried before.
It is important to mention that despite the global increase in competition in telecommunications, Telkom is the number three player fighting for space to trade and compete fairly. Despite this, Telkom has the highest fixed employee component than any of the others trading in different countries. This is not a justification but important to contextualise the matter and deal with it factually.
Mr Hendricks said Dr Mahlangu has not addressed the main issue. Members are unanimous that this is a systemic problem, which has caused economic trauma. The petition simply highlights that there could have been many affected and many have been shunned out of the economy. If Telkom just wants to address the concerns in the petition, this will not be enough because the Committee is interested in more than that. If Dr Mahlangu does not have the mandate to expand on this, then Telkom must send someone who can. The mechanism must not only address the issues raised in the petition but everyone wanting to enter the telecommunications space. Telkom has previously tried to hamper a big company like MWEB – how much more has it done to small economies in the township?
The Chairperson said there are two issues. The first one has to do with the petitioners and the second one with engaging all of the private sector. Members should engage with the given responses separately and prepare issues for Telkom and deal with those gaps
Mr Sibusiso Gumede, Committee Content Advisor, said the petition came through the Speaker of Parliament. Therefore the Committee has an obligation to give feedback to the Speaker. Since this matter has been hanging for quite a while, this meeting was supposed to address specifically the issues raised in the petition. He supports Dr Mahlangu’s view of having an ongoing engagement with Telkom. Since the IFT companies were also invited to this meeting, it is fair to find out from them if this approach from Telkom of an internal process currently underway is acceptable.
Ms Evelyn Smith, Director at Sudane Projects and Services, replied that she was not comfortable with Telkom’s proposal. Telkom did not address the core issues, and their presentation is centred on the present, discussing neither the past nor the petition. They should go back to the drawing board and come up with better suggestions.
Mr Sithembele Xolo, Project Director at Folo Arch Designs (Pty) Ltd, supported the point by Ms Smith. This matter started a long time ago, and there has not been a commitment from Telkom’s side to address it. The key complaint is about the work they have done but not been paid for. Telkom has been evasive in addressing that matter. We were hoping for an outsider, in this case, Parliament, to give a directive. He is not confident that Telkom will resolve it now. The non-payment has affected the businesses heavily in a very negative way. This matter should be dealt with here, and the other issues can be dealt with at a different forum.
The Chairperson proposed that Members digest those responses and involve IFT leaders again and the Committee guide Telkom on these matters. All the grievances must be dealt with properly so that the Committee Report to the Speaker will be comprehensive and it has engaged the petitioners about the Telkom responses.
The Committee supported the proposal from the Chairperson.
Mr Gumede added that it would have been ideal for Telkom to engage the IFTs before they appeared before the Committee today to avoid this back and forth. The Committee is unable to resolve this today. The matter may have to be deferred and the Committee engage with the IFTs and Telkom separately. Then the Committee Report can be written.
The Chairperson said to both Telkom and the IFT companies that the Committee is unable to resolve this until it has all the facts. Telkom must go and deal with the remaining five matters. The Committee will try to open up an urgent meeting slot and invite the IFTs back to resolve this.
Dr Mahlangu said that Telkom has tried to resolve this but this is now two-pronged. There is also the big policy issue where we need to engage how we empower on SMMEs and there are efforts on our side. Part of the fibre companies has started on this. When we get into a township, the first person it sells to is any person in that township with a licence who wants to retail Telkom’s services. That is something that needs to be dealt with on an ongoing basis but there are burning issues now.
Dr Mahlangu asked if the IFT companies can take the opportunity to engage and allow Telkom to help them, even if there is a lack of trust. The IFTs can report to the Committee if they were not helped. Can they take that opportunity to come to us and allow us a chance to help them?
The Chairperson asked if the petitioners agree with the two proposals. These are that Telkom will engage with them and finalise the five matters. Secondly, the Committee will invite the IFTs separately so we have concrete facts and evidence and insight so we can come up with recommendations.
Ms Evelyn Smith replied on behalf of the IFT Companies requesting that this process is sped up because if one has a dispute with Telkom, it suspends the contract. She has been without jobs for two years now and she has unemployed technicians. This has affected everything because there are matters that cannot be attended to because of unemployment.
The Chairperson said that the Committee would like to have more time with the IFT companies. It does agree on the urgency of these matters. Telkom is willing to have continuous engagements with the companies. If the IFT companies do not engage with Telkom, the Committee is unable to address their unemployment.
The Chairperson said that the IFTs indicated agreement to the meeting with the Committee. The Committee will schedule the meeting with them, but they are also allowed to engage with Telkom.
Dr Mahlangu also agreed to the proposal and added that Telkom is likely to have already sent its report on the five matters to the Committee before the second round as they do not want to sit on this problem.
The Committee minutes of 20 April 2022 were adopted and the meeting adjourned.
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