Eskom is Officially Befok: Telkom Already Lost This Fight

Eskom’s chairman is arguing with business leaders about who should control the power grid – a fight Telkom lost a decade ago, costing South Africa billions and leaving us stuck in the digital slow lane. Jislaaik. We're seriously having this debate *again*? It’s like watching Bafana try to defend a corner kick – predictable and frankly, a bit kak. ## Remember Telkom? Yeah, This Feels a Lot Like That… Let's rewind a bit, bru. Back in the early 2000s, Telkom had a monopoly on the last-mile connectivity. They were both the builder of the network *and* the service provider. Anyone wanting to get online had to go through them. Imagine only being able to buy biltong from Checkers, even if your local butcher had a better deal. That's what it was like. This situation created a serious bottleneck, stifling competition and keeping prices high. It set the stage for the mess we're seeing with Eskom now, because the principle is exactly the same: you can’t be the grid *and* the gatekeeper. ## The R449 Million Fine and a Whole Lot of 'Sorry, Not Sorry' Telkom wasn’t exactly playing fair. The Competition Commission caught them abusing their market power between 1999 and 2004, slapping them with a R449-million fine. They weren’t done there. Another case, covering conduct between 2005 and 2007, resulted in a further R200-million penalty *and* a commitment to functionally separate their wholesale and retail divisions. The Commission wanted Telkom’s wholesale arm to treat its own retail business “just another customer.” Sounds lekker in theory, right? But… ## Local-Loop Unbundling: The Promise That Never Was …it never actually happened. Government promised local-loop unbundling – opening up Telkom’s copper network to competitors – by November 2011. Icasa, our communications regulator, could only offer a framework proposing consultations, working groups, and a “true bit-stream product” by November 2012. None of it materialised. It was all talk, no action. The opportunity to unlock competition and drive down prices was completely missed. Vumatel, Octotel and Frogfoot, seeing the deadlock, wisely started building fibre networks, but those guys had to do it the hard way – building *around* Telkom’s stranglehold. ## Openserve: When Telkom Finally Admitted It Was the Problem By 2015, Telkom finally admitted they were the problem. They spun off their wholesale arm as Openserve. Sipho Maseko, then-CEO, put it bluntly: “Through this separation, and the creation of Openserve, we remove critical stumbling blocks on our path to success.” And, crucially, he added: “Shared accountability is tantamount to no accountability.” Think about that. They were *finally* admitting that being both player and referee was a disaster. But by then, a decade had been lost, consumers had paid more, and South Africa had fallen behind. ## Why Electricity is Different (and Way More Befok) Here’s where things get seriously worrying, boet. In telecoms, the market *could* eventually route around the gatekeeper. Building fibre is expensive, sure, but possible. Nobody is going to build a competing national transmission grid. There will be no plucky start-up stringing rival 400kV lines across the Karoo. Independent power producers (IPPs) that can’t get grid access simply can’t connect, and their projects die. That’s why a competitive electricity market is the real prize of the reform programme. This isn’t just about higher prices; it's about whether we ever unlock our economic potential. Eskom’s current standoff isn’t just about their future; it's about the entire country. ## So, What Does This Mean for Your Load Shedding? We need to get those IPPs connected, and fast. The current situation is throttling renewable energy investment – exactly what we need to fix this mess. The solution? An independent transmission system operator. Business Leadership South Africa (BLSA) is arguing for this, and President Cyril Ramaphosa has publicly agreed, stating that the independent transmission system operator “will have ownership and control of transmission assets and be responsible for operating the electricity market.” ## The R440 Billion Question: Who Pays to Fix This? But it's not simple, bru. Eskom’s chairman, Mteto Nyati, raises valid concerns about potential cross-default clauses in lender agreements if there’s immediate legal separation. But these are sequencing problems, not reasons to abandon separation altogether. And let’s be real, an operator that owns nothing has no balance sheet, and without a balance sheet, it can’t raise the R440-billion needed to build more than 14,000km of new lines over the next decade. The lesson from Telkom is clear: delaying this is the most expensive option. Telkom fought separation for a decade, watched their network’s value evaporate, and *then* embraced separation as part of their turnaround. Eskom’s board needs to stop re-litigating settled policy and start negotiating a transfer that protects lenders, workers, and the grid itself. Look, the situation is befok, but not hopeless. Eskom needs to learn from Telkom’s mistakes. This isn't about politics or personalities; it's about basic economics and the need to unlock competition. **Verdict:** Eskom needs to stop fighting the inevitable and embrace an independent transmission operator. Delaying this will only cost South Africa more in the long run. But what happens if Eskom *does* agree to the separation? Will the lenders play ball, or are we facing another decade of darkness? Click here to find out what the financial implications of an independent grid operator truly are.