South Africa’s big four mobile operators – Vodacom, MTN, Cell C and Telkom – are spending more than R32 billion on network infrastructure upgrade in 2017.
The figure is likely to balloon to more than R100 billion if you include fibre network providers such as Vumatel, Seacom, Dark Fibre Africa, Fibrehoods, Vox, Frogfoots, OpenServe, Smart Village and Rain, etc.
MTN is the biggest spender with R11.5 billion, followed by Telkom’s R8.6 billion and in the third position is the country’s biggest mobile phone operator Vodacom at R8.5 billion and in fourth is smaller Cell C at R3.5 billion.
With all the billions of rands spent by mobile phone operators to upgrade and build new network infrastructure, just pause for a second and ask, will it get into the hands of South Africa emerging and black-owned firms or other local entities?
Will there be emerging blacks’ firms able to get massive contracts to build quality networks required by mobile operators?
There have been none so far, and mobile phone operators have been upgrading their networks since the granting of their licenses, more than 20 years ago.
Clearly, they are not apportioning enough capital to black companies.
The country has several highly-skilled black engineers that have been working for Telco’s and some have been retrenched with years of experience.
However, none of these engineers – not even those who have built network infrastructure firms – have been awarded multi million rand contracts to build and upgrade networks of Vodacom, MTN, Telkom and Cell C.
It appears the black owned companies if they are given any work at all, are receiving crumbs of the multi-billion rand pie.
Mobile phone operators are reluctant to disclose details regarding their support for emerging black players when building their networks.
Considering the huge amounts of money mobile phone operators are spending on network build, including fibre to the home and business, it is shocking that the lion’s share spent by operators goes to foreign and local white owned firms.
Getting a breakdown of infrastructure build from operators is like trying to extract a tooth without an anaesthetic.
The question is, do black owned firms have requisite skills? If they do why don’t they get lucrative contracts to upgrade and build new network infrastructure for mobile phone operators?
Mobile phone operators claim that they don’t include a breakdown of their infrastructure spend tendered by black or emerging firms to construct or enhance their networks.
Unfortunately, even the drafters of the Telco’s annual reports are not giving us a clue on empowerment spend on infrastructure build, but strangely operators are volunteering information on the breakdown about their staff complement and money spent on supporting enterprise development, plus corporate social development initiatives.
Why should you care about this?
As a customer of Vodacom, MTN, Cell C or Telkom, you spend your hard-earned cash on enabling these mobile operators to generate billions of rand in profit, but none of it is used to empower those previously disadvantaged by apartheid.
Furthermore, the mobile phone industry is the only profitable sector developed during the new dispensation and has a duty to contribute to the transformation of society and to develop new, emerging players.
The majority of mobile phone operators’ customers are black. These customers probably can’t even identify a single black-owned firm that has been supported by Telco’s to participate and build the country’s network infrastructure.
It seems that the trade-off for not benefitting black owned SA firms by Telco’s is that contractors, such as Nokia, are expected to comply with BBBEE regulations.
However, globally there is a push to support local firms to ensure that local content, skills, expertise, and innovation are given a chance to thrive. Why not in South Africa?
It has been more than 20 years of building and enhancing our networks in South Africa.
In theory, black-owned firms should have been given enough chance to amass experience to build and enhance mobile phone operator’s networks.
Then, if black-owned firms are unable to acquire and build skills in more than two decades it’s a serious tragedy or they are being sabotaged.
For the past two decades, I have been following this industry but clearly, there is no willingness to support black-owned network builders.
Telco’s don’t care about network firms that are local, but they are very keen on spending all their billions on foreign and local white owned firms.
This is not sustainable, BBBEE is a peaceful method created to level economic playing fields and create new black-owned firms.
Vodacom, MTN, Telkom and Cell C, should not force black-owned companies into a corner lest they fight back.
For the sake of the mobile phone industry, operators must reveal how much they are spending on black-owned firms lucky enough to get work to build their networks.