Cable Theft State and it's Impact on Telkom

Over the past two years, Telkom has experienced a significant surge in copper cable theft as a result of the international increase in copper prices primarily due to demand by rapidly industrialising countries. As a result, cable theft, in 2006/07 translated into a loss of approximately R685 million, which includes estimated revenue losses and security costs. Cable theft losses for 2007/08 stood at R863 million at the end of January 2008.

Certain areas are targeted by highly organised syndicates and individuals who seek to cash in on what has become a lucrative market.

Through its Network division as well as Telkom Asset and Revenue Protection services, Telkom strives to ensure that service interruptions are minimised by:

• Alarming cable routes.
• The deployment of armed response.
• Patrolling of identified hotspots, and
• Securing unauthorized access to entry points in the network.

In addition to all the security initiatives implemented by Telkom to contain the problem, the Company also works closely with Non-Ferrous Theft Combating Committee (NFTCC) under the auspices of Business Against Crime, the South African Police Services and local communities.

In order to further minimise the impact of copper theft, Telkom constantly evaluates the options of:

• Taking overhead cable and burying it underground.
• Deploying alternative technology through either fibre optic or wireless applications.

In cases where it has become virtually impossible to eliminate service interruptions, wireless-based products, among others, are offered to customers as an alternative to the normal fixed wire line service. It is important to note that the above could be offered if the customer is situated in the footprint of the available wireless technology.