Liberal economists continue to shout privatisation as the answer to managing state owned enterprises when the world’s fastest growing economy is going in the exact opposite direction. If anything, China has proven that state-owned enterprises play a pivotal role in the development and stimulation of a national economy and that the state should be buying up more than selling off.
Sadly, not only have our universities’ economics departments not moved with the times but so have their definitions on concepts such as ‘public goods’. A public good is defined as a good that is both non-excludable, allowing those who have not paid for the good to still use it, and non-rivalrous, meaning more than one consumer may use it. Common examples of public goods include water, electricity, roads etc. Moving into the fourth industrial revolution we must question whether something like data used to access the internet is not to be defined as a public good.
The advent of the mobile cellular market in South Africa happened at the same time that it was re-entering the global economy. It was therefore opportune that Telkom, a state-owned enterprise, partner with an international company such as, Vodafone, to establish one of South Africa’s major mobile communications companies, Vodacom. While both Telkom and Vodafone then enjoyed a fifty percent stake in Vodacom, it served the developmental agenda of the new South Africa well, as it allowed government to partner with the private sector to further its ICT goals.
What many forget is that when Telkom was established in 1991, it inherited a gross-bearing debt of over R10 billion with interest rates as high as 19%. At the same time, it was hit with the Premium-rate (087) service debacle which included fraud on a widespread scale and had to write-off R77 million. The service was shutdown at the end of 1992. All of this mismanagement before the dawn of democracy.
Vodacom went live by 1 April 1994 and was hailed, in its nascent months, as being one of the fastest growing cellular telephone networks in the world. Before going live it had already installed 280 base stations and began its first day of operations with 10 000 subscribers. Two years later, Vodacom had a 60% market share.
In 1997, Telkom started selling-off stake with 30% of equity going to its strategic equity partner, Thintana, the USA based consortium, SBC, and Telekom Malaysia Berhad. Today, the state owns only 39% of Telkom while Telkom owns only 35.5% of Vodacom. We may suggest that the state, through the establishment of Vodacom by the state-owned enterprise Telkom, played a direct role in the mobile-phone revolution with its rapid roll-out in South Africa. The democratic government had prioritised and ensured that our people had access to mobile-phones which continue to play a pivotal role in the fourth industrial revolution. The challenge today is high data costs.
Despite the ICASA charter regulations for new end users and subscribers, South Africa continues to rank as one of the countries in Africa with the highest costs for data. Weekend Argus reporter, Bulelwa Payi reported in “Data costs still too high in South Arica” that on average South Africans paid just under eight US dollars for 1GB while Egyptians, the cheapest, paid just over a US dollar. Even in neighbouring Namibia, it cost just over a US dollar while two US dollars in Mozambique and US$2.79 in Nigeria.
Telkom, the now partly state-owned enterprise, continues to offer the cheapest data with 1GB costing R100. In other words, it is still only the state-owned enterprise that is prepared, like other SOE’s, to put the country’s developmental needs ahead of profit. If government wishes to be radical in its approach to data costs it should do the same that it did in the early nineties and establish a state-owned enterprise looking specifically at and undercutting the cost of data. It should then go further and declare data a public good and just as the poor receive free water and electricity, and the wealthy receive free street lighting, clean parks and streets, so too government, through this state owned enterprise, must allocate a certain amount free data to all citizens per month.
Needless to say that the economists and pseudo-economists will cry foul at such a proposal. Yet if we are serious about embracing the fourth industrial revolution we must be able to embrace such revolutionising ideas. If we want our children and young people to adapt to our technological era, despite being unskilled or unemployed, we must make data as accessible as we did mobile phones during the nineties. If only some of our political parties were this radical in innovation in their manifestos.
Wesley Seale is a PhD student in Beijing, People’s Republic of China and Zahir Amien is an independent political commentator.