The cracks widen

[rpm]

http://www.mybroadband.co.za/nephp/?m=show&id=4785

"While operators elsewhere were pumping billions into infrastructure, Telkom was slashing costs. Evidence suggests it went too far"

Nice broadband article by Duncan McLeod.

 

[bekdik]

There are two ways of increasing profits.

1. Increasing sales by way of offering better products and services - this is the more difficult of the two as it requires visionary thinking and a will to infuse a better attitude in all of the staff

2. Reduce costs. This is the easy option. Every staff member gotten rid of adds to the bottom line. Every infrastructure project cancelled adds to the bottom line. Of course the fact that one eventually has no staff, no infrastructure and no business, is not of the slightest of interest to those who are in it for the short term maximisation of personal gain.

Guess which one Telkom went for. Address answers to Telkom CEO Papi Molotsane

 

[RoosTa]

This was all the work of $izwe Nxasana (which everyone seems to forget), but he (cleverly) packed his bag (and his millions of Rands) and left before the sh**-storm hit. Molotsane will need to do a lot of work to 'fix' what Nxasana did, more than what he is currently doing though.

 

[BTTB]

And here we are, almost 5 years down the line and things are still the same.

No offence to Neotel, but I voted No on the Poll on the Front Page about them bringing in any kind of service before XMas. Perhaps people do not realise that XMas is a few weeks away. Not sure how they are going to build all that infrastructure in such a short space of time.

The Privatisation of Telkom was done all wrong:
Handing the Local Loop and The SAT3 Cable to those ungrateful sods on a silver platter was a big mistake that is going to cost us for years to come.

 

[Slinky511nx7]

In Johannesburg, it takes an average of eight weeks to get a broadband line installed by Telkom. Some unlucky consumers have to wait nine months.

So in other words, you can raise your children before getting your adsl line installed.

 

[Sneeky]

2 great reports from DM in one day

If Telkom had a real competitor in the fixed-line market, it would have been in big trouble. But it doesn’t have much competition so it’s been able to subject people to service expected from a government department, not a listed business.

priceless

 

[Tarzan]

This was all the work of $izwe Nxasana (which everyone seems to forget), but he (cleverly) packed his bag (and his millions of Rands) and left before the sh**-storm hit. Molotsane will need to do a lot of work to 'fix' what Nxasana did, more than what he is currently doing though.

And he is at FNB if memory serves. This is making me nervous because I bank there. I must say I have noticed an increase in banking charges the last 2-3 months - might be the Sizwe-factor kicking in...

 

[MaD]

And he is at FNB if memory serves. This is making me nervous because I bank there. I must say I have noticed an increase in banking charges the last 2-3 months - might be the Sizwe-factor kicking in...

$izwe is at First Rand.. under who's licence Vodacom launched their credit card recently..

 

[sabagamma]

Good luck Telkom, you are going to need it in the future. A perfect storm of problems is going to hit you shortly. The best part is, you are going to have to spend a huge amount of money to fix the mess you created for yourself.

Telkom, remember what your mother told you, a stitch in time saves nine.

 

[RogueTr00per]

Telkom has no feelings, so our anger is misdirected

If we could only direct ALL of that heat at the people behind the scenes (Ivey, $izwe, etc...) that have engineered this sorry state of affairs, perhaps they would think twice about carrying on in this fashion. $izwe has left the building, and now he's scott free. He must feel like he's on top of the world, not having to pay for his crimes.

We can wish Telkom a slow painful death, but it's the peon employees and newest shareholders that will suffer when that happens. This is a ship where the captain bails first, and to hell with the passengers and crew!

 

[ic]

ISPs — companies such as Internet Solutions and Verizon Business hope to be granted licences to build their own networks using broadband wireless technology called WiMax. They’ll probably focus on the business market first, but benefits for consumers are sure to follow.

Telkom CEO Papi Molotsane is aware of the threat these challengers represent. Telkom has said it will increase capital expenditure to ensure it’s capable of meeting demand. Molotsane had better move fast.

Sick Puppy Moletsane, did he not recently convince her Poisonous Ivyness that only wired [fixed-line] network operators [Telkodemonopolies, NeOTel, Sentech &| InfraCo], should be allowed to have wireless spectrum & licenses to operate WiMax networks, and that existing wireless operators with an upgrade path for WiMax should just forget about ever being allowed to do WiMax???

That guavamint can allow one Sick Puppy to do so much damage, boggles the mind, as does the fact that Mbeki has not used his flame-thrower on Ivy's ass & fired her .

PS: Yes, let us not forget $izwe for he stole a lot of money from consumers & businesses over several years, whilst Sick Puppy Moletsane is managing to catch up after slightly more than 1 year, and then there is also Jay Naidoo - former MoC that had a hand in the Telecommunications Act of 1996 that guaranteed Telkodemonopolies' monopoly until 2002 - except that her Poisonous Ivyness dragged it out for another 4 years [and counting]...ultimately I blame Mbeki bcos he has had the supreme power of Mugabe to do whatever he wants, and this is the result of his lack of interest in the future of SA.

 

[kilo39]

ultimately I blame Mbeki bcos he has had the supreme power of Mugabe to do whatever he wants, and this is the result of his lack of interest in the future of SA.

Life @ 30 000 feet, who cares what happens on the ground - seemingly least of all Mbeki.

(With his pretend world diplomacy, and nobody wants to hear from him anymore.) One day the atrocity that is Africa will be placed firmly at his feet - who will do the washing then?

 

[Debbie]

There are two ways of increasing profits.

1. Increasing sales by way of offering better products and services - this is the more difficult of the two as it requires visionary thinking and a will to infuse a better attitude in all of the staff

2. Reduce costs. This is the easy option. Every staff member gotten rid of adds to the bottom line. Every infrastructure project cancelled adds to the bottom line. Of course the fact that one eventually has no staff, no infrastructure and no business, is not of the slightest of interest to those who are in it for the short term maximisation of personal gain.

Guess which one Telkom went for. Address answers to Telkom CEO Papi Molotsane

Good post, although I prefer holding our long-forgotten Sizwe more in error.

2 great reports from DM in one day

Yes it's becoming a pattern that is repeating itself more and more....

One question I want to ask, with this article in the background, is whether or not others see Telkom 'expanding' in proportion with the telecoms environment? It seems to me as if they soon will have fewer fingers in the telecoms-market pies; however, at the end of the day, they will still have some fingers in every kind of pie - and it is this synergy that I worry about. Suppose, for example, that Telkom does receive the multimedia licence up for grabs (the 'competitor to dstv' licence, whatever that's called). What consequences would this have for the provision of broadband, given the force of content/device/ITservices convergence?

 

[kifoth]

... What consequences would this have for the provision of broadband, given the force of content/device/ITservices convergence?

Based on what I've read, I'd assume their expansion in to pay TV would be a "good" thing. Note the inverted comas

They seem to be leveraging this expansion off of their infrastructure (I stand to be corrected here), so that they can do stuff like pay TV by becoming SA's first cable TV operator, using broadband lines to pipe video to homes. Hence my "good" rating. IPTV uses lots of bandwidth, which should force an infrastructure upgrade (I've heard people speculate on the forums that it's the reason why they increased ADSL speeds to 4mbps).

Whether or not the synergy between their various en devours will lead to them monopolising other areas probably depends on what else they get into. I doubt that they'll kill MultiChoice off, so at worse we'll get a Duopoly in pay TV.

Personally, as a web dev guy, I'm more worried about them getting into IT. If they get their hands on BCX, they'll have too big an advantage over the other IT players. Right now, everyone in the IT community hates Telkom because Telkom's rates put a huge limit on what they can offer customers. If BCX are suddenly able to undercut everyone else's prices because they're getting sweetheart rates from Telkom, everyone is going to gravitate to them. The IT industry is already hyper competitive. A Telkom and BCX merger will probably upset the balance quite dramatically.

 

[Debbie]

Based on what I've read, I'd assume their expansion in to pay TV would be a "good" thing. Note the inverted comas

They seem to be leveraging this expansion off of their infrastructure (I stand to be corrected here), so that they can do stuff like pay TV by becoming SA's first cable TV operator, using broadband lines to pipe video to homes. Hence my "good" rating. IPTV uses lots of bandwidth, which should force an infrastructure upgrade (I've heard people speculate on the forums that it's the reason why they increased ADSL speeds to 4mbps).

Whether or not the synergy between their various en devours will lead to them monopolising other areas probably depends on what else they get into. I doubt that they'll kill MultiChoice off, so at worse we'll get a Duopoly in pay TV.

Personally, as a web dev guy, I'm more worried about them getting into IT. If they get their hands on BCX, they'll have too big an advantage over the other IT players. Right now, everyone in the IT community hates Telkom because Telkom's rates put a huge limit on what they can offer customers. If BCX are suddenly able to undercut everyone else's prices because they're getting sweetheart rates from Telkom, everyone is going to gravitate to them. The IT industry is already hyper competitive. A Telkom and BCX merger will probably upset the balance quite dramatically.

kifoth, it is exactly the BCX situation and the multimedia licence thing and the new submarine cable and all of these types of activities that are going on which I interpret as Telkom's synergy.

Yes there is some competition coming as described in the article. But in the medium-term, of what significance is this competition likely to be, given the context of ITconvergence? Telkom is no doubt following a policy that is designed to deeply entrench their de facto monopoly status. I think I'm just looking for reassurances that, in the medium to long-term, Telkom's synergy won't ultimately just come along and envelop the entire market (assuming that some decent competition does actually materialse in the short to medium term).

 

[Nokkie]

So in other words, you can raise your children before getting your adsl line installed.

rofl!!!

 

[ic]

...IPTV uses lots of bandwidth, which should force an infrastructure upgrade (I've heard people speculate on the forums that it's the reason why they increased ADSL speeds to 4mbps).
...

While I don't know anything technical about IPTV & Triple-Play etc, I think it is important to realise that Telkodemonopolies would effectively be streaming content off of servers [either centrally located, or more likely distributed regionally - within SA], what this means is that most of the bandwidth used will be national and not international, from content server to the local loops to each customer's premisis...

 

[kifoth]

most of the bandwidth used will be national and not international, from content server to the local loops to each customer's premisis...

Even here, the local loop is pretty poked Not everyone is getting upgraded to 4mbps (yet). There are still loads of people out there who can't get ADSL at all. The problem with targeting the consumer market is that you need to get a lot of consumers on board to be profitable and the only way you can really get large numbers of consumers is by attracting them with cool stuff (like decent, cheap internet that doesn't only cover local sites).

Right now, Telkom only really care about the business market. Consumers are an after-thought. Most of their profit comes from the captive corporate sector because it is here that they can squeeze the most cash for the least investment. All businesses have to be on the internet and they have to have land lines to be successful. They have no where else to go, they have to accept what they are given and they generally don't want to speak up in case they get targeted. Basically what Telkom have here is a low user base giving high profit margins, which suits them perfectly. They just need the bare minimum in staff and hardware to keep the money machine running.

The consumer market is a different ball game. To compete effectively here, you need loads of subscribers which means lots of support, otherwise they cancel their contracts and go elsewhere (see cellphone growth vs landline fall off over the last 10 years). Now days with the internet, you have to work flat out to keep them happy, which again means spending money (see Sentech vs iBurst).

This is why ADSL growth is expanding so slowly. They are still treating ADSL like a business tool and selling it as such (high profits, low user base). They simply aren't geared to running the kind of consumer-focussed operation that we see abroad.

Telkom is no doubt following a policy that is designed to deeply entrench their de facto monopoly status. I think I'm just looking for reassurances that, in the medium to long-term, Telkom's synergy won't ultimately just come along and envelop the entire market (assuming that some decent competition does actually materialse in the short to medium term).

If they are aiming to launch media services to consumers, Telkom will have to change their business model. They will face real competition as they are up against other big media players who think they have this sector tied up (MultiChoice, eTV, SABC etc). Watching Telkom try to get a foot hold here could be interesting and quite possibly very good for the public. The fact that they (for now) control one of the means of distribution isn't that important since they don't control any of the content.

The BCX deal on the other hand is f#ck off scary It involves Telkom using its existing business model to do exactly what Debbie is worried about. They are going to do to IT Business with BCX what they did to the ISP Business with TelkomInternet.

 

[ic]

I would love to be a fly on the wall inside Telkodemonopolies, we simply do not know what percentage of ADSL customers are residential [which also includes very small businesses], and how many ADSL customers there are operating from an office building instead of using Telkodemonopolies Digicrap.

Of the people that I know, that have ADSL, nearly all of them run home offices, although I'm sure there will be many small businesses in office buildings, that could barely afford Digicrap and switched to ADSL when|if it became available to them. One of the reasons for the 3GB c[r]ap was to protect Digicrap [essentially uncapped & """unshaped""" but slow depending on price] by crippling ADSL [also shaping etc].

My point being, that Telkodemonopolies could already have many more residential ADSL customers than it has business ADSL customers.

Also, about upgrading infrastructure, yes Telkodemonopolies does need to upgrade the local loop to even achieve the miserable speed of 4Mbits/s [by international standards], the primary way to do this is to shorten the copper length from customer premises to exchange, which is done by replacing copper from the roadside distribution boxes to the exchange and mini-DSLAMs inside the distribution boxes, which essentially leaves a much shorter copper distance from distribution boxes to customer premises. The Huawei mini-DSLAMs would also allow Telkodemonopolies to provide ADSL2+ and S[H]DSL...

 

[DragonLogos]

From pillar to post

Maybe Papi's five pillars have slipped down the Cracks

Telkom have been trying to avoid ADSL for years now, pushing ISDN for years... just like flogging the poor old horse

They knew that there would be big problems if the tide went against them because of the way the local loops were set up, but no, Telkom knew better, well ha ha ha.... they were wrong, and it really feels good to sit back and say, well I told you so

I think what really gets me is not that are wrong about soo many things, but they get paid so much for it