Telkom: Bad service, good share

BTTB

BTTB

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Telkom: Bad service, good share

30/12/2005 11:23 AM
By: Bernhardt van der Linde

Johannesburg - "If you can't beat them, join them," might be a good approach for investing in Telkom shares and partially hedging telephone costs.

A number of analysts currently recommend buying Telkom shares at its price:earnings ratio of 9. A dividend yield of more than 7% is also predicted.

Opportunities

* Broadband internet services should show aggressive growth and its new price structures for internet service providers - rates based on the amount of data used - will have a positive effect on Telkom's profits.
* Vodacom should benefit from Vodafone's larger shareholding, as new products and expansion in new markets, especially Africa, should be very positive for Vodacom's profit. Telkom holds the remaining 50% share in Vodacom, which is responsible for 25% of its turnover.
* Telkom wants to push its debt:equity ratio up from its current 44% to 50% to 70%, which could mean large dividends or the buying back of shares.

Risks

* Rapid and aggressive competition could cause Telkom's earnings from traditional fixed line business to fall.
* The cost of communications in SA is under the spotlight and intervention by the authorities could cause profits to fall. The Independent Communications Authority of SA has restricted the increase in Telkom's rates to the inflation rate minus a productivity saving of 3.5%.

On the last trading day of 2005, Telkom (TKG) was trading at R136, down R2, or 1.4%, on the JSE from Thursday's close of R138.
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I would rather sell my soul than to buy a share in the devil's empire
 
Matter of Principle.

I would rather give my cash to a charity than buy Telkom shares.

I have my principles. Sorry.
 
I'll buy telkom shares in a few years' time. SNO gets up and running... 99.9% of telkom subscribers ditch them out of principle and the share price plummet so hard and fast it leaves a wet stain on the JSE's floor. I'll buy a single share and keep it to show my grandkids what happens to a company that refused to listen to its customers and just went on screwing them for every penny possible
 
"If you can't beat them, join them," might be a good approach for investing in Telkom shares and partially hedging telephone costs.
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WTF! :eek: Strange world!
 
stoke said:
If you can't beat them - join them ... well - the governmint is doing exactly that, and they offered that opportunity to their people.
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Yeah - the government is really looking out for the people. :rolleyes:
 
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