Telkom and the South African economy : achieving the optimal relationship

South Africa needs a modern, sophisticated telecommunications network to ensure economic development and political stability. The same network must also provide affordable and reliable service to a great percentage of the population. The telecommunications industry is currently monopolised by Telkom, a state-owned business enterprise (SBE), and does not appear capable of meeting these basic requirements. The purpose of this paper is to present a case for restructuring Telkom and liberalising the telecommunications industry to best serve the needs of the South African economy. The objective for restructuring the telecommunications industry must be to maximise long-term consumer welfare for all South Africans. This paper argues that consumer welfare will be maximised only by dismantling the statutory monopoly structure and moving toward a highly competitive, privately owned telecommunications industry. The economic issues, of course, cannot be discussed realistically without reference to political, social and historical variables, all of which are also considered. By focusing primarily on economic issues, however, this paper strives to avoid the ideological disputes which usually surround discussions of state ownership. This paper focuses on the telecommunications industry because it represents the single most important infrastructural component in a modern economy. It also presents a unique opportunity if managed well, and a grave danger if allowed to continue in its current structure.

Grantor dc:publisher.institution

School of Economics

Year dc:date.issued

1995

Author dc:creator

• Baird, Peter Walther Orgell

Advisor dc:contributor.advisor

• Black, Philip

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/11427/15975

OAI identifier oai:identifier

oai:open.uct.ac.za:11427/15975