Telkom, MTN, Vodafone talks confirmed

[rpm]

http://mybroadband.co.za/news/Telecoms/1195.html

 

[KampfGherkin]

Urgh.

Guavamint would earn quite a hefty mint from it's 38% share in Telkom if an assumed R50-billion sale of its Vodacom stake were to happen.

Gee, after that, Guavamint could sell said shares to MTN and totally afford to put a down payment on some crackpot NEPAD cable across the pond (for which that down payment will go towards paying for meetings and buffalo wings).

Then Vodacom, which would by then be 100% Vodaphone owned, becomes another Telkom/SBC debacle. All of its profits go overseas to its foreign masters while we get the derrière treatment once more in beautifully sunny South Africa.

And MTN becomes Supreme Telco Overlord #2.

Oh wow! Our future has never looked so golden.

 

[Glordit]

Perhaps this is a good/bad thing... time will tell...

 

[BandwidthAddict]

Does the government hold a stake in MTN? If not, what about the tsunamis?

 

[MrG]

Does the government hold a stake in MTN? If not, what about the tsunamis?

haha, nice one!

 

[krycor]

Kaplan mentions Telkom's international links (especially via the SAT-3 fibre cable) as being potentially attractive to MTN.

"Maybe this is a way to for MTN to control its own destiny?" says Kaplan.

That boat has sailed and me thinks is set to sink hence Telkom -trying- to jump ship. It would however give mtn the ability to take on other countries in afriica better me thinks especially considering the higher cost along the west coast and the bigger markets like nigeria? hrm a nice optic spine up africa carrying bandwidth might work out quite well and they are the leader in africa me thinks interms of multiple countries.

Problem is this tho, can mtn buy Telkom when cell-c + vodacom, although not forced to go thru Telkom fixed lines, are mainly going thru it? I mean unless there is a seperation of the businesses mtn would have a huge advantage over other cell companies.

 

[Methias]

*Sigh* Its a pity MyADSL/MyBroadband can't buy telkom

 

[HosstheBoss]

Would it be wrong of me to assume that, with most of these reports being about MTN buying telkoms fixed line business that things like telkom media; telkom SAIX could/would/might not be included in the deal?

Heres to the complete tearing apart of telkom into smaller interests!

I can just see telkom media bitching on MyADSL in the future about the crazy bandwidth costs telkom SAIX is charging it for its "Triple Play" backhaul

 

[AirWolf]

That boat has sailed and me thinks is set to sink hence Telkom -trying- to jump ship. It would however give mtn the ability to take on other countries in afriica better me thinks especially considering the higher cost along the west coast and the bigger markets like nigeria? hrm a nice optic spine up africa carrying bandwidth might work out quite well and they are the leader in africa me thinks interms of multiple countries.

Problem is this tho, can mtn buy Telkom when cell-c + vodacom, although not forced to go thru Telkom fixed lines, are mainly going thru it? I mean unless there is a seperation of the businesses mtn would have a huge advantage over other cell companies.

I was thinking the very same thing.

 

[sox63]

If Telkoms fixed line assets and Vodacom are sold what is left?

 

[ic]

*Sigh* Its a pity MyADSL/MyBroadband can't buy telkom

The fact is that without Vodacom, Telkodemonopolies would effectively be a somewhat "empty shell" [as mentioned in a news article a few days back]: apart from an aged local loop allegedly imminently facing unbundling, and SAT-3 [and SAFE] that is allegedly imminently being thrown open to Telkodemonopolies' competitors, Vodacom is the real shining jewel in Telkodemonopolies' lead [Pb] crown - the moment that 50% of Vodacom is sold off, Telkodemonopolies will lose a lot of its appeal - what will be left is a heavily-incompetent middle & top management, as well as a demotivated workforce that would love to work for NeeTel if NeeTel was prepared to employ thousands of people [which NeeTel is not prepared to do], and a lot of customers that will defect given half a chance...

He supposes that there would, quite possible, be more sense in MTN buying certain parts of the fixed-line operation (like Telkom Business or the data division).

Is "the data division" a reference to Telkodemonopolies-SAIX

Honestly I don't know why MTN would be so keen on buying into Telkodemonopolies, maybe if MTN [as mentioned in the article] only wanted to buy parts - say SAIX or TelkodemonopoliesHindernet - that might make more sense, don't know if it's even possible to unbundle TelkodemonopoliesBusiness or whether it is actually worth much - considering the allegedly impending LLU factor...IMO MTN should wait for the impact of LLU before proceeding with buying part(s) or the whole of Telkodemonopolies - at least MTN should be able to get a better price after LLU has started - if LLU ever does materialise...

When considering Africa, Kaplan notes the major difference between South Africa and the rest of the continent is the underdeveloped fixed-line operations in countries outside of SA.

Ummm Telkodemonopolies is not exactly a shining example of a fixed line network operator - considering that this monopolistic beast has turned away millions of potential and existing customers, and has opted for an underdeveloped fixed line operation within SA - even Nigeria doesn't want Telkodemonopolies and is aware of the rampant incompetence.

Analysts Moneyweb have spoken to over the past few weeks did not foresee competition problems. Kaplan agrees, saying that if Telkom was allowed to own 50% of cellular giant Vodacom, he could not see a problem with MTN owning a much smaller Telkom (ie, the fixed-line business).

I disagree with these unnamed analysts:

1. Just bcos a monopoly has been allowed to own 50% of Vodacom does not mean that a different kind of (MTN+(Telkodemonopolies-0.5Vodacom)) monopoly should be allowed to exist: the telecoms market is currently broken and needs to be fixed in a responsible way that increases competition instead of perpetuating a distinct lack of competition.
2. What about all the backhaul links that both Vodacom and CellC currently rent at great expense [same applies to MTN] from Telkodemonopolies? - if MTN buys into Telkodemonopolies then MTN will get preferential treatment ITO backhaul links from Telkodemonopolies and Vodacom & CellC will be at a distinct disadvantage. IMO it is more likely that after selling the 50% of Vodacom, Telkodemonopolies might then buy CellC - I don't see any major problems with that considering that CellC currently only has a couple of million customers and so few backhaul links, that even if CellC then gets preferential backhaul link treatment from Telkodemonopolies, then MTN and Vodacom would be forced to self-provision at a much faster pace.

 

[Prometheus]

Hmm, don't know exactly what to make of it. It might actually be a good thing. Overseas companies are not used to such huge profits and isn't there a limit as to how much return on investment can be "exported" to a foreign company. We may well see Vodacom investing more in the future rather than paying the shareholders, although Vodafone isn't exactly known for cheap prices overseas.

Does fixed line include national and international links? If so then MTN won't need to lay it's own links and will be in a good position to drive down the cost of mobile data and force others (vodacom) to self provision. Would love to see Telkom complain to MTN about the cost of data.

 

[AirWolf]

Hmm, don't know exactly what to make of it. It might actually be a good thing. Overseas companies are not used to such huge profits and isn't there a limit as to how much return on investment can be "exported" to a foreign company. We may well see Vodacom investing more in the future rather than paying the shareholders, although Vodafone isn't exactly known for cheap prices overseas.

Does fixed line include national and international links? If so then MTN won't need to lay it's own links and will be in a good position to drive down the cost of mobile data and force others (vodacom) to self provision. Would love to see Telkom complain to MTN about the cost of data.

Yep that really would be something

 

[Tux]

I have just one request from MTN if they buy telkom
Prosecute Lulu Tsunami and Steve Chinese Maths for gross stupidity

 

[dominic]

there will be huge regulatory and competition issues with such a deal and it will mess hugely with declarations of significant market power etc

...@ the end of the day this makes me very uncomfortable - feel a bit like a compulsive gambler watching a hide the pea (whatever - you know the three cups shifting around thing?) operator and knowing that, although i have to play, i have no chance of getting anything but screwed

 

[AirWolf]

there will be huge regulatory and competition issues with such a deal and it will mess hugely with declarations of significant market power etc

...@ the end of the day this makes me very uncomfortable - feel a bit like a compulsive gambler watching a hide the pea (whatever - you know the three cups shifting around thing?) operator and knowing that, although i have to play, i have no chance of getting anything but screwed

Absolute power corrupts absolutely --> never been a more true statement in the context of the South African telecomms sector. Too much power in too few hands will definitely mean trouble for the rest of us

 

[Roman4604]

Have to agree with you here dominic, I can see no good coming from a MTN owned Telkom.

The culture of excessive profiteering runs far deeper with the mobile operators than it ever did with Telkom. Just look at the mobile interconnection/termination rates which are over 3 times more expensive than to a Telkom fixed line.