Huawei bids for Telkom contract

CHINESE telecommunications equipment supplier Huawei is soliciting partnerships from subcontractors as it positions itself to secure a major contract with Telkom.

Huawei is bidding for an outsourcing contract for Telkom’s engineering and field workers.

In the past few months, Telkom has issued a number of requests for information (RFI) and requests for proposals (RFP) in a bid to determine whether to outsource certain divisions, including field workers.

The process, which is part of Telkom’s overall cost-reduction programme, is ongoing. It wants to bring staff costs down to 25% of sales, from 29% at present.

It has so far outsourced its call centres, internal printing operations‚ supply chain and properties.

In an e-mail to potential partners, Huawei said it was negotiating with Telkom about engineering and field maintenance service for the fixed network. It said last week that, as a bidder, “we cannot divulge any information without consent from Telkom”. It said the leaked e-mail was “simply a conversation between procurement and supplier”.

Huawei already has contracts with Telkom and mobile network operators. The company, which is aggressively growing its business locally, plans to increase its workforce of 1,000 in SA by 50% in the next five years. In June, it appointed Steven Wu as the new CEO for its South African operation.

In its RFI for field services, Telkom said the document was to “explore market appetite and capabilities” for potential outsourcing of all or part of the “customer fulfilment and assurance functions for products and services” in mainly consumer and enterprise markets.

“We are now taking action to determine the feasibility of outsourcing within certain areas of the Telkom business. The first step is to establish the capabilities in the market,” said Telkom spokeswoman Jacqui O’Sullivan. Huawei “may also choose to express an interest in the RFPs currently in flight”.

Labour union Solidarity said the proposed subcontracting of Telkom’s workforce by Huawei, if it were awarded a contract, was likely to raise concerns because some of the companies that have taken over some of Telkom’s divisions were retrenching employees. It said Barloworld, which took over Telkom’s supply chain operations, and WNS, which took over its call centres, proposed retrenchments less than six months after they took over.

The union’s Marius Croucamp said this was not permitted in terms of the Labour Relations Act.



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