Friday, July 24, 2009

Meet Al Caphone, capo de tutti capi of SA’s telecommunications cartel

By Llewellyn Kriel (Thoughtleader)

In the past six months Vodacom made more than R14 billion, 12.2% better than it performed previously. While millions of South Africans suffer the very worst of the global economic crisis, it seems counter-intuitive that a telecommunications company can bask in that kind of profitability.

This should spark great admiration. Until you come face to face with Vodacom.

Since its inception, the cellular communications giant has become, not only the dominant force in its market and on the African continent, but a global player in telecommunications.

Its corporate logo dominates South African life, leisure and landscape. The company’s sponsorships dominate sports and entertainment. It boasts 40 million customers, just short of 6 700 employees and is one of the biggest and most powerful corporate forces in South Africa.

In fact, “dominance” is so embedded in everything about Vodacom, the megalith ranks cheek by jowl with every other corporate goodfella in history. Hardly surprising that Vodacom has earned the moniker, “Al Caphone”.

South Africa’s Competition Tribunal is champing at the bit to get its teeth into what most South Africans believe is a corrupt, extortionist and monopolistic telecommunications cartel made up of Vodacom, its chief competitor, MTN, a minor player, CellC, the practically stillborn Neotel and the notoriously monopolistic parastatal landline dinosaur, Telkom.

After decades of suffering Telkom’s take-it-or-leave-it bullying born of apartheid’s baasskap mentality, South Africans — and especially the disadvantaged majority deprived of anything but the most rudimentary telephone access — welcomed the arrival of cellphones in the early 1990s. Since then the devices and their multiplicity of noxiously intrusive and expensive add-ons have become ubiquitous features, spanning the spectrum from indispensable lifeline to faddish status symbol. And the docile masses love them.

What lurks beneath the surface of Al Caphone though is as dark, rank and untouchable as any secret society. It is also symptomatic of the worst in South Africa’s backwoods version of a telecommunications industry.

Vodacom’s product across the range is massively overpriced, as are those of its competitors, ensuring South Africans remain in the telecommunications Dark Ages. While this has always been true of cellular voice communication, it is most keenly felt in data comms where fees would elicit a standing ovation at any convocation of la cosa nostra.

Transparency and truth are shrouded in its cacophony of multi-layered marketing. It treats its clients as would the best drug dealer in any ‘hood, ensuring their “addiction” is fed and they’re kept blissfully comatose. In fact, while Telkom is showing the embryonic glimmers of taking years of universal opprobrium to heart, Vodacom’s dysfunctional notion of client service is the epitome of the oxymoronic concept of “nurturing disdain”.

Despite the internet’s unparalleled potential for social upliftment, education, progress and bridging the chasm between the unsophisticated, know-no-better, have-not majority and the wealthy minority, it remains shackled behind prohibitive costs, patchy and unreliable networks, intransigent “systems”, myopic business models, unwilling and self-centred government and the damned stampede to maximise profits at any price. Vodacom’s stunning success since the beginning of this year bears testament.

While newly listed Al Caphone was earning more than a million rand every 20 minutes, I was able to experience first-hand the real freedom and mind-blowing potential of the world wide web.

“This is the way the grown-ups behave,” a Pentagon analyst told me in typical American braggadocio — except it wasn’t empty boasting. I was stunned, and I have been exposed to the Net longer than SA has been exposed to majority rule. What I encountered in the US was tantamount to a science-fiction scenario — and is as much a basic human right and as freely available there as potable water.

Thanks to unlimited instantaneous internet access, Chuck and Becky Anyone (or Jose and Maria Cualquiera, for that matter) can find jobs quicker, sell their car faster, rent out their spare room safely, get almost anything readily and cheaply, ease the recessionary rigours effectively, heal themselves and their relationships, talk to their leaders — and get direct answers (a complete unknown in SA) — save money, save lives, save … well, everything. It costs the equivalent of R250 a month to have unlimited, instantaneous, go-anywhere internet access in the US.

The closest South Africa comes is a pitiful 20GB ceiling that costs upward of R5 000 at snail’s pace speeds, excluding the extortionist R2 000 to R3 000 price of a modem. Vast swathes of the country have no effective network coverage so even your state-of-the-art Mac Notebook is about as useful as cruising the Richtersveld in a Ferrari.

Finding digs to rent in Virginia, US, was a totally free doddle for me, and every location I visited took it for granted that wireless internet access was in the same category as a bathroom. Utilities may or may not have been included in the rental, but free wireless internet access at the best speeds available always was. No modem, no limits — just a security passphrase the first time you connect to the household router. After that, you’re connected the moment you switch your PC or laptop on.

Shahaan, my fellow lodger in Del Ray ran three companies in India and Sri Lanka in his spare time and spent his weekends playing high-level bandwidth-intensive multiplayer games against opponents in seven different countries (except SA) — for mahala. In South Africa I can barely afford to keep my anti-virus software up to date.

For the most powerful African economy, the internet and free communications remain luxuries, privileges reserved for the megarich. The country’s suspect telecommunications industry will do everything in its power to ensure it stays that way. You don’t make Al Caphone-type revenues from ubiquitous free “products”.

In fact, it has taken me two weeks of navigating Vodacom’s labyrinth of duplicity (maybe, lies is too harsh - maybe), half-truths, Obfuscation through Multiplicity (a clever type of sales warfare in which companies carpet bomb the consumer into numb, blind submission by overloading them with choices) outright contradictions, falsehoods, tergiversations, misinformation, armies of scantily trained minions and impenetrable but utterly unhelpful call centres. This ordeal had me visit 11 outlets (including Vodaworld) speak to 107 people, build up a file 44 pages thick, spend 27 hours on cellphones and landlines (did you know it takes at least two minutes and 30 seconds to speak to a human if you dial Vodacom’s misnamed “customer care” line 082-111?) spend more than R400 traipsing around Gauteng — only be met with frustration at every turn. In fact, the most helpful people turned out to be Vodacom’s competitor, Telkom!

While it is unconscionable that an outfit with 40 million customers does not even think a complaints centre might be a good idea, why would you be surprised that of 26 promises to return phone calls, only two were kept.

The result is I have absolutely no trust in anything Vodacom promises, publicly or privately. And probably never will.

In the process I encountered unplumbed levels of mismanagement and resentment, a deep-seated policy of obstructionism, hostility, abuse, rabid contradictions and a corporate ethos founded, not on the axiomatic “the customer’s always right”, but on “the customer’s always guilty”.

And don’t expect any joy, let alone progress, from Poison Ivy’s successor, The Comrade General. Years of military indoctrination in the art of secrecy earned Siphiwe Nyanda the reputation of being the proverbial stonewall when it comes to honest and open communication. And unless he’s had a road-to-Damascus experience in the past few months, having him in control of communications is like leaving the kids with Andrei Chikatilo for the holidays.

Icasa, ostensibly the industry regulator, is utterly ineffectual, toothless and lost in senile dementia. Meanwhile, the Regulation of Interception of Communications and Provision of Communication-Related Information Act — euphemistically known as Rica — is nothing but yet another subtle erosion of personal freedoms which the ANC has, over the years, inveigled into our daily lives.

Maybe David Lewis, head of the Competition Tribunal, will prove to be our Eliot Ness. Otherwise all that money-posing-as-people that’s supposed to save SA next year at the 2010 Soccer World Cup will see only “You are not connected” on their laptops.

Oh, and by the way, Vodacom’s 15-year veteran media communications head, Dot Field, suddenly resigned this week.

3 Opinion(s):

Anonymous said...

South Africa is without a doubt the Ripoff capital of the world.

You pay top dollar and get crap service.

Pensioner said...

Very interesting post. Talking of their oposition, MTN. I saw a poster outside their local branch that said "Pensioners can now also qualify for a cell phone contract" I have never been more insulted. I probably earn more per month from my retirement funds than 85% of their customers. On what basis do they decide who can and cannot have a contract. I don't even have a contract, have no need for it, I have "Pay as you go" phones for me and my wife only for emergencies, spend maybe 1 Rand per month per phone. These gangsters won't get rich from me.

Exzanian said...

Mmmm. If you pay a visit to the Timesonline site and view the comments section, it is amazing to see the number of blacks commenting on articles! Obviously all on company PC's, company broadband and company time. There is a noticeable trend for the comments to dwindle after 16H30 SA time, when all these "bloggers" make their way home.