Moneyweb Interview With Reuben September

[Ozymandias]

http://www.moneyweb.co.za/mw/view/mw/en/page55?oid=140928&sn=Detail

 

[Sneeky]

MONEYWEB: Reuben, taking that point into consideration, looking at the likes of the Competitiveness Report that was released in Cape Town today, South Africa being amongst the top ten of African countries with the cheapest broadband, that still means we're more than double the price of developed markets. Are we likely to see any further significant reductions as we go into the next couple of years?

REUBEN SEPTEMBER: I believe we can always pick a price for any operator and say there they are higher than the others, you know. That is often the situation. What we're looking at, we're looking at prices overall, but looking also at niches where we know we are going to stimulate growth, where we know there will be volume uptick. So, broadband, the entry level is a good example of that. I mean, the fact that we are the tip of Africa, we have not the privilege of having the volume of international connectivity that the northern hemisphere has, the fact that there are a number of operators that are operating under Chapter 11 conditions, where assets that have been written off under the bankruptcy regulations make the playing fields completely uneven. So, from our perspective, from a pricing point of view, we say let's look at our market, let's look where the growth potential, this is a scale business as well. The more we connect, the lower our cost per unit - and that we're also indicating in our price reductions. I'm confident with this comprehensive strategy, looking at total value to the customer, we're making inroads, you know, and I'm sure the market will reflect that going forward.

This tune has been played to death and its bollox.
You sat back and enjoyed the ride with no competition in sight with minimal investment in infrastructure. Now its panic stations.
bleh.

 

[Ozymandias]

This tune has been played to death and its bollox.
You sat back and enjoyed the ride with no competition in sight with minimal investment in infrastructure. Now its panic stations.
bleh.

I couldn't agree more. 28% profit margins would be the envy of any company in the world. To achieve this with such pathetic service is not a company to be admired. Telkom is going to have to change it's complete mindset in a competitive world. They will need some very creative public relations to win back the public. For many, Telkom have burnt all their bridges and it would take decades for the indelible stain on their memories to fade.

Telkom can invest in new infrastructure as much as they like. Unless there is a complete change of attitude, however, I envisage consumers bailing ship. The day that they have a representative on MyADSL, answer the phone within a few minutes and stop passing me through four different departments to sort a problem, only then will I believe that that they are moving away from their monopoly mindset.

MyADSL has done wonders in exposing the true nature of this beast. Telkom has flogged this profit ponny to death and it will only be a matter of time before shareholders see richer pickings elsewhere. Atone for your sins now Telkom, before you crash and burn.