CWU rejects the network industry reforms in the new economic strategy proposed by Treasury

Communication Workers Union (CWU) of COSATU, notes the latest New Economic Strategy unleashed by National Treasury last week coined, “Economic                Transformation, Inclusive Growth and Competitiveness: Towards an Economic Strategy for South Africa.” As a start, economic policy positions cannot be made in vacuum, but as part of a broader, inclusive and consultative process with social partners. It seems this surprise package seeks to assert Treasury as the lead         department in terms of “supremacy of economic policy in South Africa.” By              introducing this mild austerity package with GEAR kind of memory, that seems to placate foreign investors and the IMF above national socio-economic development.

While we accept and acknowledge the need for reforms in infrastructure bottlenecks and red tape that seeks to make trade and market more efficient, we are concerned at the underlying agenda that steers away from a substantive socio-economic transformation agenda

As we operate in the Information Communication and Technology (ICT) and 4th         Industrial Revolution (4IR) sector, we respond to the following key points regarding the Network Industries Section of the new Economic package. CWU’s key concerns are as follows:

Job losses in 4IR sector

Firstly, the 4IR and ICT sector are one of the fastest growing sectors in South Africa, yet most of the leading large ICT players, banks, and Telcos are in the throes of large scale retrenchments, especially in call centre operations. Sadly, working class and blacks in general and Africans in particular, are bearing the brunt of these latest retrenchments. These issues of national and sectoral Economic and Network    economy models should be debated at NEDLAC and the Presidential 4IR       Commission.

Lack of context and reasons regarding High data prices

The other key area that seems to beproblematic is the super high data and content costs that South African consumers pay. For well over 15 years, South Africa has had the dubious honor of paying the highest Data costs. This is the result of          oligopolistic behavior of corporates, as well as business strategy, and a weak ICASA regulatory that has not regulated in the public interests.

Spectrum policy a national asset/commons and not private property:

The Treasury Economic policy package ignores the extensive sector consultations that were done over the past 3 years through the Integrated ICT Policy strategy process. It should be noted that Spectrum is a strategic national asset and not       private property to be auctioned to the highest bidder who has deep pockets. This is a neo liberal regulatory approach to telecoms regulation, and must be further      interrogated with a view to ensure that national socio-economic development        objectives are maintained. More importantly, it seems the private Telco operators are being given a gift, without any social obligations. If any spectrum is allocated, there needs to be a moratorium on all retrenchments as a starting point. The Small Medium Enterprises (SME’s) should also be afforded an equity share on the        spectrum. In any strong economy around the world, intense labour in located in the SME’s. This is an area that we need to focus on if we want to stimulate economic growth. 

Burden for reform on SOE’s and not private operators concerning:

Another neo liberal narrative is that the burden of network industry reforms falls    unfairly mainly on SOE’s such as Telkom who are asked to unbundle the Local loop. CWU argues that this must be done in a phased approach, and job impact             assessments must first be done. We also demand that the private mobile operators also open up their national backbone and exchanges to SME’s in order to foster competition.

ICT Sector in SA part of public sector procurement mismanagement

It should also be noted that sections of the ICT sector have been part of many        public-sector procurement mismanagement cases in the recent past. These actions have a negative impact on society and artificially inflates cost of services in society and it has a repulsive impact on society.

Need for a Digital Industrial Development strategy

Finally, CWU believed South Africa is ripe for a more integrated Digital                    Industrialization strategy that is rooted in the NDP 2030 and is that various sectoral industry policy interventions are aligned with clear socio economic and innovation systems and outcomes. No sector industry policy should be developed in a           vacuum, as part of a national innovation and development system.

The end

Issued by the office of the General Secretary CWU


CWU General Secretary

Aubrey TshabalalaCell: 061 481 1080