Attack on Telkom stranglehold

http://www.24.com/news/?p=tsa&i=557639

Now, now, is that not good news. Telkom wheels falling off? No wonder the HUGE advert in Sunday papers as to how cheap the broadband became over the last few years. Bl@@dy imbeciles

Any form of competition to Telkom is welcome IMHO.

Nirvesh Sooful, the city's chief information officer, said Cape Town would also establish an optical fibre network that would make it the the most wired city in Africa.

The investment in broadband network would lower the costs of doing business in the city, Sooful said.

"The network will attract investment from particularly creative industries and the call centre sector. It could also help the city win the bid to be the media centre for the 2010 Fifa World Cup," he said.

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Good stuff, the only fibre the South African public has seen so far is Kellogs All Bran..

Attack on Telkom stranglehold

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It's still only a verbal atack which means nothing. Only when they start offering services to consumers will it be an attack on Telkom.

Telkom, which faces competition from a number of providers, says it is not too perturbed at the likelihood of further erosion of market share as it believes it is strongly positioned to compete effectively in a liberalised market.

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They don't sound too worried but I bet they are. Their share price is very reliant on those fat profits they pump out every year. In a competitive market, it is not only about price but also about service. Turning this beast around from it's screwing mentality to one that endears itself to the public, will happen too late for many. The damage has been done during it's fat years when they plundered the Telcomms landscape. Lean years are ahead after they have milked the cash cow dry and left nothing but a bad reputation.

Telkom's staff costs rose 13 percent to R8.45 billion in the 12 months to March, as it hired 641 people for a total workforce of 26 797. It will continue to rise after years of staff cuts which boosted their bottom line but resulted in drastically poor service. Adding to the wages, the costs of upgrading it's network, the cost of starting a new media arm, looming competition from the municipalities, SNO and it's own sibling, Vodacom - and any investor would be asking if Telkom is still a good bet.

Dropping prices in August might boost it's broadband penetration, but an overall cut of 1.2%, means they are giving with one hand and taking with another. They are clinging to their 28% profit margins while they still can. It will take an extremely innovative new CEO to restructure this company away from it's monopolistic mindset.