The Congress of South African Trade Unions (Cosatu) says it rejects the proposed takeover of Telkom by MTN – citing previous, larger mergers which left workers jobless.
On Friday (15 July), MTN advised its shareholders that it has entered into discussions to acquire the entire issued share capital of Telkom in return for shares or a combination of cash and shares.
Cosatu, which is the country’s largest trade federation, said that the merger of large companies has seen thousands of workers lose their jobs and encouraged anti-competitive and monopolistic behaviour, including price gouging.
“Telkom, in particular, has seen thousands of jobs shed since it was listed, and highly qualified and experienced workers have been casualised. South Africa’s data and call charges are already far above the international average and have become a real impediment to economic growth and job creation.
“This has a real impact on workers having to pay exorbitant cell phone charges and SMMEs struggling to survive. We cannot afford to see an already monopolistic sector riddled with allegations of collusion, becoming even less competitive.”
Cosatu said that Telkom is still largely a ‘publicly owned company’, with the state and the Public Investment Corporation having collective 51%-plus ownership of the company.
“Workers demand to hear from the state and the PIC, which invests public servants’ pensions and Unemployment and Injury on Duty Insurance Funds on this critical matter. We intend to engage them and remind them that their broad mandate is to protect the interests of workers.”
The federation also urged the Competition Commission to step in as the proposed takeover is about two companies in a ‘highly concentrated and lucrative sector’.
“The Competition Commission will need to be firm in opposition to such predatory behaviour and consider previous price manipulation and other unsavoury allegations that have plagued players in the telecommunications sector.
“The government, the PIC, and the Competition Commission need to firmly and clearly come out and oppose this damaging proposal by MTN that has infamously abused its power and domination before.”