The National Union of Metalworkers of South Africa (Numsa) says the planned buyout of telecommunications group Telkom by MTN should be rejected, warning that the privatisation of the partially State-owned enterprise (SOE) will be detrimental to the working class and the economy.

Earlier in July, Telkom and MTN announced that they were in the early stages of discussions for the potential transaction that will see MTN acquire Telkom.

“If these plans materialise, they must be rejected. Numsa condemns any plan to privatise Telkom. Telkom is a SOE and government, the shareholder, currently owns a 40.5% stake in it,” the union said in a statement on Wednesday.

“We have consistently warned about the dangers of privatisation and the dire impact this would have on the working class and the economy.”

Numsa, outlining five reasons for its stance, says that Telkom, as an SOE, has a developmental role to play in the South African economy, noting that an SOE-owned telecommunications company is required to implement government policy to grow the economy leveraging the critical role that the information and communication technology (ICT) sector plays.

“The role of an SOE is to grow the sector, to create a value chain and create jobs. It also levels the playing field by controlling prices and forcing the private sector to give greater access to the broader working class. If Telkom is privatised its developmental agenda will be nullified.”

Numsa raised concerns that the privatisation of the telecommunications group will only benefit the “politically connected” and that the consumer will ultimately pay more for services.

The union also believes that the privatisation of Telkom will hamper the company’s agenda to be a key driver of the Fourth Industrial Revolution and ensure that rural areas and outlying communities are served.

“Only an SOE like Telkom can drive an agenda to ensure that the entire country has access to telecommunications services and particularly rolling out fifth-generation [connectivity] across the whole country at an affordable rate for the working class and also for small and emerging business,” it explains.

Lastly, the union expresses concern that Telkom’s vast training programmes will end, should the deal go through.

“Telkom currently trains high numbers of artisans for the telecommunications space, which contributes meaningfully to the growth of the economy and skills creation for the ICT sector.”

Numsa refers to the success China has had after embarking on a radical programme to industrialise and create jobs relying on SOEs.

“They are showing the world that SOEs can be a success story. What is needed is political will. There is no political will to invest in our SOEs and no political will to make them viable,” the union claims.

“Numsa will continue to drive campaigns to reject any further privatisation of Telkom and our remaining SOEs. Such a move will result in even more job losses and it will stifle economic growth even further,” it says, noting that the union will continue to drive an agenda for a job-led industrial policy within which the ICT sector must play a crucial part.