The Crossed Line: The South African
Telecommunications  Industry in
Transition

Author:  David  Kaplan
Reviewed by: P Eric Louw

Within  the  contemporary  world  economy,  production  and  circulation  of
information is becoming central, but in Africa, only South Africa is in any way
currently  poised  for  meaningful  integration  into  the  resultant  Information
Age  (an  Age based  on  digital  telecommunications,  fibre  optics,  computers,
etc).  At  present  South  Africa  has  the  22nd  largest  telecommunications
network  in  the  world  and  is  its  15th  largest  telecommunications  market.
However,  as  David  Kaplan  explains, this  network  and  industry  is  beset  by
problems.

Kaplan  unravels  a  fascinating  story.  The  existing  telecommunications
network and industry provides a case study of the way in which the workings
of  the  apartheid  state  machinery  were  simultaneously  both  a  valuable
stimulus and a handicap to the development of this valuable economic sector.
Before  1958 South Africa  imported  all its telecommunications  requirements
from  Britain.  The  National  Party's  nationalism,  as  well  as  the  military
considerations  of the  resultant  white-nationalist  state, provided  an  impetus
for  channeling  resources 
locally  based
telecommunications  industry.  State  influence  on  the  growth  and  direction
development took in this sector was exercised through the South African  Post
Office,  which  was  by  far  the  largest  consumer  of  this  technology  in  South
Africa.

the  development  of  a 

into 

Up until the late  1970s State intervention was mostly a progressive force
in  the  telecommunications  sector.  For  example,  it  resulted  in  South  Africa
becoming the  first  state  in the southern hemisphere to operate a fibre optics
system;  and  currently  South  Africa,  with  85%  of  its  telecommunications
system digitized, is still ahead of the European Economic Community average
(with only France ahead  of South Africa  in this regard). South African  State
intervention resulted in the development of local manufacturing capacities for
PABXs  (Private  Automatic  Branch  Exchanges)  in  the  1960s  and  for  an  IC
(Integrated Circuits, or 'silicon chips') foundry in 1978.

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Review

However,  the  problem,  as  Kaplan  pints  out,  is  that  the  South  African
market is not a large one relative to the capital costs required for setting up
such  manufacturing  capacity.  Therefore,  in  order  to  entice  profit-driven
investment into this sector, the State offered  10-year Manufacture and Supply
Agreements to the manufacturers of telecommunications equipment. In terms
of such contractual  agreements, the Post  Office  provided  guaranteed  orders
over  a  number  of  years.  This  was  to  enable  the  recovery  of  capital  costs
through  long production  runs  (of ten years). Perhaps  it is significant  to note
that the list of those benefitting financially from these contracts reads like a
'who's  who'  of  the  South  African  white  establishment  in  both  its  mining
capitalist and (Cape-based) Afrikaner-nationalist  forms — ie. Anglo American,
Barlow Rand, General Mining and Sanlam.

These contractual agreements, as Kaplan demonstrates, currently create
enormous  problems  for  the  South  African  telecommunications  sector.
Problems  have  arisen  because  long  production  runs  associated  with  slow
product-innovation  may be appropriate within Fordist  industrial  capitalism,
but  are  highly  inappropriate  for  post-Fordist  information-based  capitalism.
The  post-Fordist  Information  Age  world  is  one  of  short-product  runs
associated  with  rapid  innovation  (Research  &  Development).  The  South
African  bureaucrats  who  agreed  to  the  10-year  contracts  were  operating
within  a  logic  appropriate  to  a  former  (ie.  Fordist)  economic  mode  of
production.

Freezing  production-lines  by  contractually  guaranteeing  a  market  for
obsolete  products  (ie.  killing  the  impetus  for  research,  development  and
change) quickly renders manufacturing capacity out of date. As Kaplan notes,
this  has  already  happened  to  South  Africa's  silicon  chip  foundry.  In  the
fast-moving post-Fordist world of the 1990s South Africa is in danger of being
trapped  in  a  time  warp. The  Soviet catastrophe  can serve to provide  South
Africans  with  a  salutary  lesson  in  the  consequences  of  allowing  this  to
happen.

If  a  post-apartheid  South  Africa  is  to  realise  its  potential  within  the
Information  Age, the existing (albeit flawed) telecommunication network and
industry  must  be  used  as  a  foundation  upon  which  to catapult  us  into  the
future  as  a  serious  actor  in  the  post-Fordist  world. Failure  to  do this  will
result  in  South  Africa  being  left  out  of the  expanding international flow of
information  which lies at the centre of the new information-based  relations of
production.  This  would  effectively  condemn  South Africans  to  the  status  of
just 
forward-looking
telecommunications policy is needed in South Africa. David Kaplan's book will
be an invaluable contribution in the formulation of such a policy.

another  backward  Third  World  nation.  A 

The formulation  of a telecommunications policy for the 'new' South Africa
will  require  a  knowledge  of:  (1)  the  structure  of  South  Africa's  existing
telecommunications sector; (2) how/why the existing structure was developed;
into  a  post-Fordist
(3) 

the  world  capitalism 

restructuring  of 

the 

V0I6N0I  •  1992 

117

CRITICAL ARTS

information-based  economy  and  the  implications  of this  for  South  Africa;
and (4) the various policy options based'upon the above. David Kaplan's book
is  timeous  as  it  will be  greatly  helpful  with  regard  to the  first  and  second
categories, and, to a considerable extent, with the fourth category.

For 

anyone 

concerned  with 

South  Africa's
telecommunications  and  media  sectors  (since  the  two  are  increasingly
intermeshing)  in  the  coming  decade,  Kaplan's  book  should  be  obligatory
reading.

restructuring 

Published by:  Witwatersrand University Press, 1990, 239pp.

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90s

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This  quarterly  subject  index  to  over  200  alternative,'
radical  and  progressive  publications  will  be  an
invaluable  tool  in  your  study  of  social  and  political
change. Ask  the  folks  at your  library  to  subscribe  to
the  Alternative  Press  Index,  a  unique  guide  to
information you won't find  elsewhere.

Libraries $125; individuals, non-profits,  and
movement groups  $30.

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SPECIAL CUMVLA TIVE EDITION FOR VOL  23,1991
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BO. Box 33109
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