FM cover story: Open season

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mcleodd

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Imagine getting one account at the end of each month that consolidates what you owe for your cellphone calls, your landline calls, your broadband connection and your pay-TV service. It’s the Holy Grail of telecommunications, one that has already been forced on operators in developed markets because of rising competitive pressure, and it’s a vision that will drive a radical restructuring of SA’s telecom industry.

Full story from the Financial Mail here:

http://www.fmtech.co.za/telecoms/fm-cover-story-open-season/
 
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Imagine getting one account at the end of each month that consolidates what you owe

No - imagine actually getting true affordable broadband and no more articles on what we are GOING to get!
 
Great article. I like the 2 year time frame as we will definitely start seeing major improvements in 2008 :)
 
Imagine getting one account at the end of each month that consolidates what you owe for your cellphone calls, your landline calls, your broadband connection and your pay-TV service.
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$$$ :D
 
“The low-hanging fruit doesn’t grow back,” September says.
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They're called testicles, Reuben. But thanks for finally admitting that you've been ripping them out through consumer wallets for years...

But a smaller Telkom, without a cellular operator in tow
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I believe it's been the other way around for a while now. Vodacom has certainly had Telkom in tow as the much more profitable and agile of the two...

Die Telkom, die. I'll bring the matches; it looks like you guys have already poured the petrol.
 
lenosb said:
No - imagine actually getting true affordable broadband and no more articles on what we are GOING to get!
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Amen to that!

It looks like those years of retrenching staff, poor service, high prices and not investing enough in their network have finally come back to haunt Telkom. It feels good. I am hoping that things will change in 24 months but I am weary after so many other empty promises...
 
WTF... telkoms fixed line business makes 100% profit (near as damnit)... thats madness...
 
Just digging through Telscums 6 month interim results thingy..

What is interesting, is the number of ADSL lines nearly doubled.. but they didn't add more than 20 percent of those new lines as Internet subscribers.
 
Not everyone is convinced the deal will happen, though. Knott-Craig says it is likely that Telkom will sell its stake in Vodacom - it’s in the interests of Telkom shareholders to do so, he says — but the fixed-line operator may not be able to conclude a deal with MTN because of competition concerns.
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That's actually an important point considering the tough times ahead for Telkodemonopolies - its shareholders are used to short-term gain returns, and there will be a major sell-off of shares if Telkodemonopolies doesn't keep its shareholders happy with proceeds from the sale of its 50% of Vodacom.
The Independent Communications Authority of SA (Icasa), which is charged with giving effect to the ECA, was expected to have issued these licences this month but it now seems this will happen only in the first half of 2008.
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Unfortunately this does not surprise me - !CASA is after all the incompetent pet of Poison Ivy & Stalin-Mafole at the Dementia of Communistications.
Consolidation, though, seems inevitable. Smaller players, unable to fund infrastructure roll-out, are likely to be bought out by the bigger players. Companies such as Neotel and Cell C could potentially find themselves in play. And services players - those that don’t build their own networks — are also likely to merge to create scale. There is already evidence of this in Vox Telecom’s aggressive acquisition spree.
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Somewhat unrelated, but Telkodemonopolies has itself set in motion something on the ADSL side of the market, where ADSL-line reseller ISPs get a kickback based on the number of ADSL lines attributed to each of them, but the kickback is small per line and only becomes significant with relatively large numbers of ADSL lines, the result of this could very well be that many ADSL reseller ISPs merge to create scale - I expect this is partly what Telkodemonopolies intended to achieve with its ADSL resell scheme - I call it sneaky manipulation of the wholesale ADSL market.
 
From an investor perspective, what the heck are Telkom gonna do with all the money they are going to get from selling their stake in Vodacom (or most of it anyway) to Vodafone, shareholders on the JSE and/or empowerment partner? And added to this, all the money they will make from selling assets to MTN? For arguments sake lets assume it will be about R70bn to R80bn ($11bn to $13bn).

Telkom Media will not be able to absorb all that cash in a short time. I dont think there is a big enough company in Africa, never mind South Africa, for any kind of takeover/merger of that size, except maybe a few mining companies (Harmony, Goldfields, ImpalaPlatinum, maybe :)), a few investment/holding companies, or banks. More likely, one of the smaller mobile companies or lots of smaller acquisitions of a few R bn each. I mean, the Business Connexion takeover was only R2.4bn. Alternatively they will have to buy shares back from shareholders - probably govt, but even that wont be enough to get rid of all that cash.

If they dont, they make themselves prime targets for takeover - there are many companies / investors that would love to get their hands on $8bn to $10bn in cash through a takeover, and then sell the company (probably in bits and pieces) once they have milked it and spend the cash elsewhere.

That is partly why from a investor perspective, I dont think the MTN-Telkom deal will go through. At least not as is speculated in the business media in SA.
 
mcleodd said:
Imagine getting one account at the end of each month that consolidates what you owe for your cellphone calls, your landline calls, your broadband connection and your pay-TV service. It’s the Holy Grail of telecommunications, one that has already been forced on operators in developed markets because of rising competitive pressure, and it’s a vision that will drive a radical restructuring of SA’s telecom industry.

Full story from the Financial Mail here:

http://www.fmtech.co.za/telecoms/fm-cover-story-open-season/
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Our company already provides this to corporates in South Africa. We could provide this to SA consumers but who pays?
 
It's a yummy nice feel good article...but I have learned my lesson all to many times. Always good news followed by bad news...it's how SA works ;)
 
P0tenc said:
It's a yummy nice feel good article...but I have learned my lesson all to many times. Always good news followed by bad news...it's how SA works ;)
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Normally your pessimism would be well founded.

In 2008/9, there are going to be just too many balls rolling down the hill. Better times lie ahead. Being CEO of Telkom has to be the worst job in the world right now.
 
any thorts on...

if/when Telskum sell Vodacom share at x amount - would they ever consider investing outside the telekoms arena - hell, with that kind of cold cash, they become a huge playa in almost any space...
cheers
air
 
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