http://www.finance24.co.za/Finance/Companies/0,,1518-24_1590441,00.html?kps=193
Telkom 'ready for competition'
16/09/2004 10:29 - (SA)
Leo Kok
Johannesburg - Telkom is ready for the new wave of competitors that will have the right as of February 1 to provide similar products and services, but the communications giant wants everyone to be treated exactly the same.
Sizwe Nxasana, chief executive, said on Wednesday that Telkom spent R50bn since 1997 on infrastructure and is therefore prepared for any competition.
But the group is holding talks with the department of communications and the Independent Communications Authority (Icasa) over the regulations that control Telkom's price determination.
"We want clarity on the changes to the legislation and whether everyone will be controlled by the same regulations. We will obviously prefer a system where prices are determined by the market," Nxasana said.
Telkom must submit its prices for the next year to Icasa every year for approval. The group is limited by a clause that stipulates that it can set its prices at the Consumer Price Index (CPI) less 1.5%.
Nxasana said the changes to the legislation have exposed certain regulatory gaps. These include how different service providers will interact in future and how cellphone operators cannot offer other value-adding services.
Despite these questions, Telkom will not apply for a postponement for the submission of next year's prices.
Nxasana said Telkom was also expecting further consultation on government's new policy when the minister makes further announcements on the planned changes and the Convergence draft legislation on October 2.
Speculation is rife on the effect competition will have on Telkom's income. Nxasana said certain divisions, particularly long-distance calls, both locally and overseas, would be affected by more competition. This division represents a mere 3% of the group's income.
It is still too early to change its forecasts for the next financial year. Telkom is committed to a growth rate of 1% in ebitda (earnings before interest, tax, depreciation and amortisation) for the next two to three years. This figure rose by 39% to R16.3bn in the year that ended on March 31.
Nxasana promised to keep capital investment at between 10% and 15% of turnover. Telkom showed a turnover of R40.8bn in the past financial year.
Although the group wants assurances about the extent of the new legislation, Nxasana welcomed the changes. The new legislation would stimulate investment in the sector and although there are about 200 value-added service providers, only a few will have the necessary capital and labour to compete with Telkom.
Nxasana also tried to allay fears about further job losses. He said the group stood by the number of 4 181 staff members as it disclosed to trade unions.
Edited by Fadia Salie
<b><hr noshade size="1"></b><font size="2"><font color="red"><b>You can take Telkom out of the Post Office but you can't take the Post Office out of Telkom.</b></font id="red"></font id="size2">
Telkom 'ready for competition'
16/09/2004 10:29 - (SA)
Leo Kok
Johannesburg - Telkom is ready for the new wave of competitors that will have the right as of February 1 to provide similar products and services, but the communications giant wants everyone to be treated exactly the same.
Sizwe Nxasana, chief executive, said on Wednesday that Telkom spent R50bn since 1997 on infrastructure and is therefore prepared for any competition.
But the group is holding talks with the department of communications and the Independent Communications Authority (Icasa) over the regulations that control Telkom's price determination.
"We want clarity on the changes to the legislation and whether everyone will be controlled by the same regulations. We will obviously prefer a system where prices are determined by the market," Nxasana said.
Telkom must submit its prices for the next year to Icasa every year for approval. The group is limited by a clause that stipulates that it can set its prices at the Consumer Price Index (CPI) less 1.5%.
Nxasana said the changes to the legislation have exposed certain regulatory gaps. These include how different service providers will interact in future and how cellphone operators cannot offer other value-adding services.
Despite these questions, Telkom will not apply for a postponement for the submission of next year's prices.
Nxasana said Telkom was also expecting further consultation on government's new policy when the minister makes further announcements on the planned changes and the Convergence draft legislation on October 2.
Speculation is rife on the effect competition will have on Telkom's income. Nxasana said certain divisions, particularly long-distance calls, both locally and overseas, would be affected by more competition. This division represents a mere 3% of the group's income.
It is still too early to change its forecasts for the next financial year. Telkom is committed to a growth rate of 1% in ebitda (earnings before interest, tax, depreciation and amortisation) for the next two to three years. This figure rose by 39% to R16.3bn in the year that ended on March 31.
Nxasana promised to keep capital investment at between 10% and 15% of turnover. Telkom showed a turnover of R40.8bn in the past financial year.
Although the group wants assurances about the extent of the new legislation, Nxasana welcomed the changes. The new legislation would stimulate investment in the sector and although there are about 200 value-added service providers, only a few will have the necessary capital and labour to compete with Telkom.
Nxasana also tried to allay fears about further job losses. He said the group stood by the number of 4 181 staff members as it disclosed to trade unions.
Edited by Fadia Salie
<b><hr noshade size="1"></b><font size="2"><font color="red"><b>You can take Telkom out of the Post Office but you can't take the Post Office out of Telkom.</b></font id="red"></font id="size2">
printf("HAHAHHAHAHAHA");