Five years ago Telkom retrenched skilled workers whom they promised to help set up as small businesses that would be contracted to the giant telecoms company.
Telkom in 2015 created the Independent Field Technicians (IFT) programme.
The aim of the programme was to help retrenched technicians to establish their own businesses to offer fault fixing to Openserve, a free-standing division of Telkom and the country’s largest fixed wholesale operator.
Telkom says the IFT programme was established as a finite programme that would offer support to these enterprises with the aim of enterprises graduating out of the programme in 2020. It adds that the aim was to foster inclusive participation of black-owned ICT small businesses within Telkom’s supply chain.
Over the past five years, Telkom claims to have procured more than R600 million from IFT companies.
“This is essentially collective revenue generated by IFT companies,” a Telkom spokesperson told TechFinancials.
See the graph below that shows the breakdown of this amount per financial year supplied by Telkom
But some technicians disagree with Telkom arguing that the programme has left them penniless with massive debts.
Technicians ‘Owe Millions’ to IDF Future Fund and Thrifty
TechFinancials spoke to several technicians, who didn’t want to be named.
They say that the project it’s a mess.
This was corroborated by a Telkom insider, who told TechFinancials that the IFT programme is in tatters.
“We only incurred debt in this project.,” one technician argued.
Another said: “We even owe Telkom. They terrorise us while they don’t give us jobs. We do repeats and work for free.”
“We were driven into this programme with beautiful promises. Look now, I owe thousands of rands to IDF Future Fund for getting loans to get cars to use for my work.”
“We owe millions to IDF Future Fund. How can we repay them if we are not getting enough jobs from Openserve?” another disgruntled technician argued.
The insider at Telkom told TechFinancials that some of the companies owned by the technicians are bankrupt.
“This is not true,” a Telkom spokesperson retorted. “The programme started with only three pilot companies employing 12 technicians to a total of 45 businesses employing 804 technicians and 38 are still active.
“When analysing the year-to-date 2020 spend with Openserve, the median spend is R2.4 million which means half of the companies have generated over R2.4 million in revenue in the first 9 months,” the spokesperson claims.
Telkom further refuted claims that IFT companies owe millions to the IDF Future Fund.
Since 2015, the IDF Future Fund has advanced loans totalling R28 million to 38 IFT companies, Telkom explained.
“To date, R13 million has been repaid while R15 million is still outstanding,” the spokesperson said.
“The IDF expects that by the end of the financial year 2020, 75% of this loan book will be repaid. As such leaving an impairment rate of 25% which is much lower than originally anticipated.”
The Telkom insider said: “If the IFT companies were not bankrupt why there are so few cars on the road branded Openserve. The truth is that most of the IFT companies have gone under and Telkom is just saving face with inflated figures. The programme is a disaster”
Furthermore, Telkom had an agreement with Thrifty, a car rental company, enabling technicians to get cars.
The technicians claim they were paying R9, 000 a month for a Nissan NP200.
“Just imagine paying Nissan NP 200 at R9000.00 a month. It’s a scam leaving us with no money to pay our staff once Openserve pays us for services rendered,” said a technician, adding that he was now bankrupt.
“We owe Thrifty millions and we can’t service their debts. We are listed with credit bureaus and can’t even get jobs with other operators or even get into government tenders. We are left with nothing.”
Telkom refuted claims of companies owned by technicians owing millions to Thrifty.
“This is not true,” says Telkom spokesperson, when asked if it is true that most bankrupt contractors who were part of the IFT programme are owing Thriffy millions?
“Only R985 000 is outstanding of which, through the fund, we are in conversation to clear this debt.”
Some of the so-called bankrupt technicians said the bulk of the money set aside by Telkom for the IFT programme went to Thrifty.
TechFinancials made various attempts since last Tuesday to get a comment from Thrifty but their call centre couldn’t provide us with contact details for their spokesperson.
Telkom insists the IFT programme is a success.
IFT companies retrenching
“Throughout the programme, the top 15 companies have outperformed their peers with higher customer satisfaction rates, faster response times, through growing their technicians from four per company to 100 per company,” said Telkom spokesperson.
However, Telkom conceded that the IFT companies were retrenching.
“In the first 6 months of the financial year 2020, the IFT Programme saw several businesses let go of their own staff due to the change in technology bringing the job count to 478 technicians,” said the spokesperson.
“This is significant as the change in technology from ADSL to Fibre and LTE has meant that there has been a decline in the number of ADSL faults.”
Breakdown of jobs graph supplied by Telkom
Technicians also argue that Openserve continues to install new ADSL lines for customers across the country.
Telkom said due to the copper migration strategy, the volumes of new ADSL lines are low and are only being installed in ‘good copper areas.’
“VDSL and ADSL customers in good copper areas will be maintained but eventually be migrated to FTTH and LTE-A.”
The Telkom insider also said that Openserve is not willing to onboard its contractors on FTTH maintenance.
“This is not true as some IFT companies were trained and onboarded for both ADSL and FTTH,” Telkom’s spokesperson explained.
One technician argued that Openserve is “trying to suppress them to stay in old and outdated copper”.
Openserve Favours Big Service Providers
On the other hand, IFT companies claimed that Openserve is giving the bulk of the maintenance work to big service providers (such as Huawei, Bytes and Lungisa) leaving crumbs to them.
“These big service providers are getting big maintenance work from Openserve and are still fighting with us for small Telkom ADSL and telephone fault work. It’s a shame they come to fight for the crumbs we are getting,” said a technician.
But Telkom spokesperson argued: “Openserve has a contingent of 46 Build service providers, 60 Commodity Service providers and 38 IFT’s. The work allocation framework is built around service providers geo-location, capacity, quality and performance of work executed. No service providers are favoured in the work allocation process. The contract with Bytes was terminated 30th November 2017.
“Importantly, we highlight that our contract with Huawei is a turn-key contract. Huawei, being an Original Equipment Manufacturer (OEM), has a much wider scope than the other contractors and sub-contractors that work on our network.”
Despite IFT companies complains, Telkom believes the programme is a success.
“We will continue to offer support to IFT companies who opt to be part of our alumni programme,” said Telkom spokesperson.
“We will offer access to our innovation programme and other value chain programmes, business support services, and networking events to facilitate access to markets.”
But one technician summed up everything by saying: “Its sad, hey. Its bad, people took packages from Telkom in 2015 (chasing a promise of Openserve IFT programme) and invested all their money into this thing and their money is now gone. What a shame.”
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