I'm not very business orientated but it sounds logical to me? Keep the people who are making up the majority of your revenue happy or else they'll look else where? My thoughts would be once that large portion is happy, then they'd look at upgrading the smaller base and with Vodacom and MTN about to start rolling out FTTH, I imagine Telkom would want to keep that customer base.
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Telkom's "invincible network" plans
- Thread starter jes
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rrh
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No necessarily so: the exchanges are rated by income production.
Thus (in Johannesburg) Linden - where many of the houses are used for business - is more important than the Westcliff / Saxonwold area which, despite the houses costing several times those in Linden, is predominantly residential.
As a result the Linden exchange has been upgraded whilst the Parkview exchange is way down the list ...
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dualmeister
Honorary Master
Just as I always suspected! The guys will fast lines keep getting faster. To hell with the rest.
F U Telkom
R13...
Honorary Master
Just as I always suspected! The guys will fast lines keep getting faster. To hell with the rest.
F U Telkom
At least you have a line. Telkom refuse to pull a line from the connection box of my flat. They hired a company to pull all these cables and the company signed off that they were done when there were still flats outstanding.
dualmeister
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TelkomUseless
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Telkom will do the opposite of each step....
FIFY
Blah....blah.....blah....
I heard the same strategy.......exact words......four years ago.......!
I heard the same strategy.......exact words......four years ago.......!
Well... based on everything Telkom says ... it seems they are winding down operations in a controlled manner. From what I can determine by there actions they want to shrink Telkom until they can shut it down.
Think about it:
1) Reduce customers
2) Reduce employees
3) Reduce services that can be offered to customers.
4) Go to 1.
Networks work by economies of scale. If they are retreating then things won't go better for them! Sure the customers on a particular exchange might not make money right now... but boy oh boy do they underestimate the network effect of cutting/not servicing those customers with the relevant products. Cutting 1400 exchanges out of 2000 out of their future plans??? That is 600 exchanges they want to focus their growth on (compared to the 4000 towers of CellC)? Compare them to Cell C -- Cell C is losing money hands over fist... but they know they cannot "scale down" investment in infrastructure. These companies RUN ON CAPITAL. Scale down capital ... you scale down the business...you die.
It is very obvious that Telkom does not have a growth strategy. Not a single statement that is made public points to something that will growth. Instead we are just seeing a controlled implosion.
Think about it:
1) Reduce customers
2) Reduce employees
3) Reduce services that can be offered to customers.
4) Go to 1.
Networks work by economies of scale. If they are retreating then things won't go better for them! Sure the customers on a particular exchange might not make money right now... but boy oh boy do they underestimate the network effect of cutting/not servicing those customers with the relevant products. Cutting 1400 exchanges out of 2000 out of their future plans??? That is 600 exchanges they want to focus their growth on (compared to the 4000 towers of CellC)? Compare them to Cell C -- Cell C is losing money hands over fist... but they know they cannot "scale down" investment in infrastructure. These companies RUN ON CAPITAL. Scale down capital ... you scale down the business...you die.
It is very obvious that Telkom does not have a growth strategy. Not a single statement that is made public points to something that will growth. Instead we are just seeing a controlled implosion.
MickeyD
RIP
You are missing a few things...
The 1400 exchanges are being maintained in their current state, not cut out. If circumstances change then some of those exchanges can very quickly be upgraded or replaced with multi-service access nodes.
At the same time they are rolling out LTE in many of these 1400 areas (not part of the Telkom Mobile/MTN deal).
Comparing a fixed line exchange to a single 3G cellular tower is nonsensical. MAYBE you could compare it to a street distribution cabinet in terms of reach...
So where is the scaling down? By replacing the switches in the 600 exchanges with multiple MSANs (per exchange area) it is increasing their capacity not decreasing it.
For me the biggest issue is that the CEO is not addressing the impact of LLU, which is "imminent".
4Mbps hardly cuts it today. Once the customers have something better they will be gone. Upgrading after you lost the customers are not going to magically bring them back.
Yes. Telkom Mobile is a cash cow for the company
It USED to be irrelelvant. It is becoming less and less irrelevant. It is a node which you can serve customers from. For most people the LTE networks will be a dramatic upgrade over fixed-line.
I have not heard about new exchanges. Replacing the switches is not upgrading their network from a business perspective -- that is just about keeping up.
Maybe. My biggest issue is that they don't have an aggressive plan to get more customers. At most their current plans maintain the number of customers in some areas and in other areas they are quickly motivating people to switch to other service providers. The generic "Telkom Mobile" is covering the areas that is not served by ADSL is ridiculous. There are 4 mobile operators. There are only one real consumer fixed line operator. So they are pushing their virtual monopoly clients to the market segment where they have the most competition???? To the segment where they failed to deliver? Sure -- that is a winning strategy. And in the SMME market non-Telkom fiber is slowly starting to infiltrate....
MickeyD
RIP
It will have nothing to do with Telkom Mobile. TM will basically become a MVNO, reselling MTN.Yes. Telkom Mobile is a cash cow for the company
The MSAN is effectively a new exchange. Replacing 600 traditional switches with over 2500 MSANs surely classifies as an upgrade?
I blame the marketers, product managers and their costing counterparts. Pricing will remain the biggest problem Telkom faces and they need to find a balance between their conservativeness and a decent pricing point. e.g. cut ADSL rental, consider naked DSL, etc.
From a technical perspective only. It does not really provide them a lot of additional business capability. So the 2500 MSANs covers the same geographical area that used to be covered by the 600 switches. Sure you can prevent current customers from jumping ship, you might increase your profit incrementally (e.g. 5-10%) and you might increase your customers incrementally (5 - 10%). It does not really deliver much from a business capability .... unless there are some drastic additional work being done on product structure, marketing etc. Replacing a switch with a MSAN does little to nothing for their bottom line if done in isolation. The 4Mbps to 10Mbps upgrade was pretty much a non-event. I expect the same from the MSANs.
MickeyD
RIP
Not true. In many cases it also covers new areas (waiting list customers) and then extends into the adjacent "non-600" exchange areas that won't be upgraded to service pockets of potential higher ARPU customers.
MickeyD
RIP
BTW I agree that the premise of "invincibility" is laughably ludicrous.... to the extent that it makes me want to cry!
Even so that is only an incremental change. Nothing transformative to the entire business. Maybe if you analyzed Telkom in isolation if they had no competition it would have made a difference. But look at what their competitors do. Vodacom's infrastructure investment is R9 billion for the year, on top of the R7 billion that is being paid for Neotel (which as an organization is also relieved from its debt with the deal). And Vodacom is not doing that just to allow pre-paid customers make more voice calls. Then there are a million smaller players doing interesting things as well - from deploying fiber in the metros to gated communities. 2500 MSANs against what Telkom is facing is decorative only. It will have little no effect without a lot of other things falling into place.
And it is not if they are deploying these MSANs fast either.
MickeyD
RIP
Again you are viewing a single program of Telkom in isolation. I predict (hopefully the CEO/CTO/CFO will make more details available at their annual results day) that Telkom is targeting the FTTH / FTTB market more aggressively than any of the other network operators. At the same time they are still upgrading their core network, which I feel is where their future lies. Then there are their data centres, some of the biggest in the country. Watch this space for another "merger" or sale...
MickeyD
RIP
I cried.