Telkom lost over R200 million during the 2015 financial year, due to copper cable theft.
Group executive for communication Jacqui O'Sullivan says R100 million was lost due to direct cable theft repair costs and an additional R107 million was spent on security services.
"The cost of cable theft to Telkom is serious and it has a significant impact on thousands of customers each year. To combat this, we are looking at migrating our customers in high copper theft hotspots onto new technology platforms, specifically those which are undesirable to criminals," according to O'Sullivan.
"Copper theft has become a more sophisticated crime over the past few years. These criminals now target our manholes armed with customised heavy-duty vehicles, allowing them to hitch the cable to the vehicle and drive out kilometres of cable, cutting off thousands of customers in a single incident," says O'Sullivan.
"For a little over a decade, Telkom has continuously recorded revenue losses due to the impact of this crime. The persistent breaks in connectivity affect not just individual households, but also schools, government buildings and industries across the country, making this crime a national concern."
In Telkom's integrated report for the year ended 31 March 2015, the company indicated copper theft losses amounted to R134 million for that financial year, with a similar amount declared in 2014.
The South African Chamber of Commerce and Industry's latest barometer shows copper cable theft levels in SA declined to R12.10 million in October 2015, from R12.60 million in September.
Telkom says it had over 6 000 incidents of theft across its copper network in the past year.
O'Sullivan says the company continues to invest greatly in securing the network with armed response, cable alarming and collaborative efforts with the South African Police Service. However, she notes, the vast nature of Telkom's network makes fighting this crime "extraordinarily tough".
"We face a unique set of challenges when it comes to copper cable theft. For example, there are areas in the Western Cape where gang violence sometimes makes it dangerous for us to send technicians into the area to replace stolen cables. In many high-theft areas, cable is repeatedly stolen, sometimes within days after replacements or repairs."
O'Sullivan says it's clear the high price of copper and strong demand from international markets continue to be catalysts for this type of crime.
New law
Last December, president Jacob Zuma signed into law the Criminal Matters Amendment Act, which changed legislation pertaining to infrastructure-related offences, including copper cable theft. The Act comes into operation tomorrow, 1 June, and those found guilty of infrastructure-related offences could face up to 30 years in prison or fines of up to R100 million.
Government says the amendments will make stricter provisions for the granting of bail, the sentencing of offenders, and the creation of a new offence to criminalise the damage or destruction of "essential infrastructure which may interfere with the provision of basic services to the public".
The Ministry of Justice and Correctional Services says stolen copper costs the South African economy between R5 billion and R7 billion each year. Eskom, Transnet and Telkom are often among the hardest hit.
Finding alternatives
Telkom says it has already successfully migrated close to 4 000 customers in cable theft hotspots to an alternative wireless product, known as Waya Waya, which does not rely on a copper network.
Earlier this year, Telkom launched a fibre trial in which DSL customers within Telkom's fibre footprint were able to upgrade their copper-based connectivity to fibre network at no extra cost. Telkom has aggressive plans for the growth of its fibre-to-the-home business and plans to roll out fibre to a million homes by 2018.
"Telkom is taking every step to ensure our network is secure and, more importantly, that our customers receive a seamless network experience free of criminal interference," says O'Sullivan.
As of 30 September 2015, Telkom had approximately 3.3 million telephone access lines in service and over one million ports connected via MSAN access. The company had consolidated operating revenue of R16.8 billion and normalised profit after tax of almost R1.7 billion for the period ended 30 September 2015.
Full year results for the period ended 31 March 2016 are expected to be released on 6 June.
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