Is Telkom bulletproof like SAA and the SABC

Telkom made around R6,4billion profit last year and still has around R10billion in its bank account from the Vodacom sale.

Why do they need a bailout?
 
Does Telkom count itself among those organizations that can count on taxpayer funded bailouts should things go wrong no matter what?
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Of course they do.
They are on a down slide now, and in a couple of years with the current management, the begging bowls will come out.
 
The government will not "bail-out" a listed company. Eskom, SABC and SAA are not public companies, they are sole owned by the government.
Telkom doesnt not need a bail-out, but if the situation arose that they started to lose money, they would have to raise cash through the same means as other public companies (issues shares, loans etc) or it would be bought out by some company that wants the infrastructure or which thinks it could turn Telkom profitable.
If the government bailed them out, the ordinary shareholders would gain at the governments expense.

The government owns massive shares in other public companies (like PPC, MTN, SASOL, Vodacom etc) through the PIC and it wouldnt bail them out either.
 
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roberth said:
The government will not "bail-out" a listed company. Eskom, SABC and SAA are not public companies, they are sole owned by the government.
Telkom doesnt not need a bail-out, but if the situation arose that they started to lose money, they would have to raise cash through the same means as other public companies (issues shares, loans etc) or it would be bought out by some company that wants the infrastructure or which thinks it could turn Telkom profitable.
If the government bailed them out, the ordinary shareholders would gain at the governments expense.

The government owns massive shares in other public companies (like PPC, MTN, SASOL, Vodacom etc) through the PIC and it wouldnt bail them out either.
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I beg to differ on TELKOM and SASOL.

:)

It would bail them out. It shouldn't but it would.
 
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The blog is not about whether it needs it or not. The blog is about finding an explanation for Telkom's actions. It is acting like there is no worry about the future. It is not building a client base with zeal and its importance to the telecoms environment will wane rapidly as time goes by. It is as if it doesn't care what happens. Short term profits for what?!!?

That is the idea.
 
Give it 5-10 years.. then Telkom will need goverment assistance like SAA etc...
 
I think Telkom is worried about the future. Yes, they burnt their fingers with their foray into Nigeria and are now hoping it will be cashflow positive in 18-24 months, but they have also identified other growth areas in the business sector, eg data centres.

They already have one of the biggest in sub-Saharan Africa and are extending the two main centres in Centurion and Bellville and then planning to build another one somewhere in Mid-Rand. They do not market this service well enough, if at all!

The other constraint is that they cannot cherry pick lucrative universal service areas like the other operators due to their licence conditions. Providing rural telephony is extremely expensive and, in most cases, unprofitable.

/will expand on other areas later; need to get to work!
 
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