Slashdot Mirror
How SBC (AT&T) Pillaged South Africa's Economy
Kifoth writes "For 8 years, SBC and Telekom Malaysia controlled South Africa's only telecommunications company, Telkom. Telkom had a government granted monopoly in order for it to connect the large parts of South Africa that had been neglected under apartheid. Instead of helping, SBC abused their position and raised Telkom's prices to be among the highest in the world. The billions they made here ultimately went to fund their AT&T merger. From the article: 'SBC, described as "congenitally litigious", is said to have played a major role in the failure of South Africa's telecoms policy to develop a competitive telephone service. Under SBC's control Telkom not only failed to meet its roll-out obligations but behaved "as a tax on industry and a drag on economic growth."'"
Seriously, I didn't see this one coming.
"16MB (fuck off, MiB fascists)" - The Mighty Buzzard
... I have to say that Telkom is absolutely terrible. Have a look here for more info.
Telkom have consistently been a stumbling block to technological progress in the country, especially with regards to internet access. Telkom owns all the international links to the rest of the world from SA, and most of the bandwidth and international calls have to be routed through them. In fact, the price of ADSL has been so prohibitive that many individuals have pursued cellular alternatives, paying per MB, for light browsing instead.
While it's easy to criticise the private companies who have been managing it, Telkom is a parastatal, and not wholly private; roughly 39% is still owned by the South African government, so I'm fairly certain they weren't too unhappy about the affair. There has been evidence of cronyism at the company, too, most likely as a direct result of this: in 2004 a government pension fund was used "to buy telecoms shares for a group of former government officials". This was part of the government's Black Economic Empowerment (BEE) requirements that firms need to be 1/4 black owned before 2010, and falls within a pattern shown, by 2004 government surveys, that "68 percent of BEE deals went to just 6 black-owned businesses, all of which were owned by top members of the ANC party."
The whole thing stinks, and Saffas get screwed, as usual.
'If Christ had tweeted the sermon on the mount, it might have lasted until nightfall.' - John Perry Barlow
It's capitalism at its best. Remember, Laissez-faire Manchester type capitalism is just one flavour of capitalism. And by far not the most frequent one.
One defining characteristic of capitalism is accumulation of capital/maximizing the profit. A monopoly is a very good way to do so. (Does Microsoft ring a bell?)
This particular monopoly was a government-granted monopoly but monopolies also develop under free-market conditions. Did you never wonder why capitalism needs all this laws and regulation to protect the *free* market? I guess it's not because companies like competitors and want them to stay.
Finally, this monopoly was granted to ensure Telkom a profit for building infrastructure in remote areas. Public services are a typical problem of capitalistic economies since they tend to be unattractive for companies.
And with the monopoly granted Telkom did what a capitalistic company has to do, it maximized its profit by raising the prices.
All I can see is capitalism at its very best. Not very pretty but nothing surprising.
"Hannibal's plans never work right. They just work." Amy/A-Team
did what a capitalistic company has to do, it maximized its profit by raising the prices
thinking like that is one of the big problem I see that allows shit like this to happen. This thing called "company" you speak of does not "do" anything. it is something virtual, the point of which is to maximize profit, but no, not by raising prices. it is to charge the maximum it can for the demand. for services such as in this case, demand is close to inelastic, and competition, in an "actual" capitalistic market, would prevent this service from being actualized till supply is much cheaper. Once the government steps in and takes the competition away, hence creating an artificial supply curve, it is the government's job to dictate the prices, as we are no longer talking about capitalism. The government needs to set the supply curve if they chose to take away what brings supply lower - hence taking away the capitalism.
This is not at all capitalism. it is a capitalistic company allowed to roam free in a non-capitalist scenario. The people working for this company allowed to roam free are under contract to not steal from it's customers. It is the government's job to monitor this, if they take away competition, a vital part of capitalism. Those people broke the contract in an enron kind of way. It is the job of the government to take these people, who committed a criminal breach of contract. Forcibly the money back from from the "company" that stole it, refunding the people who were victims of criminal theft. Then prosecute the actual people that made the breach of contract decisions, and prosecute them for theft of billions of dollars. Prosecute them the same way as if they were to go into a bank and steal that amount. And revoke the company's license to exist as a company (within that country's jurisdiction).