Analysts say Nxasana produced the goods in spectacular style, taking full advantage of Telkom's extended monopoly while the introduction of a fixed-line competitor stumbled from farce into tragedy.
Since it listed on the JSE Securities Exchange and the New York Stock Exchange two years ago, Telkom's share has appreciated by more than 270%. Investors have flocked to it as management slashed costs and wielded its monopoly pricing power.
...But the honeymoon period Telkom has enjoyed by virtue of its monopoly will soon be over. It will soon have to contend with its first meaningful fixed-line competitor. After years of delay, the second network operator (SNO) is expected to be licensed soon and could begin offering services before the end of the year, though initially it is expected to target the wholesale and corporate markets only.
Telkom is also likely to face increasing regulatory and political pressure to reduce its prices. Government has signalled it wants to accelerate the introduction of further competition in the telecom industry.
Icasa also recently held public hearings into the cost and service levels associated with the company's broadband digital subscriber line products. Icasa says it will produce a findings document soon, though it is unclear what specific action it might take - or can take. (this is US!!!)
