The story of Telkom's worst business mistake

Jan

Who's the Boss?
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Telkom's biggest mistake

Telkom’s selling its 50% stake in Vodacom when it did was, by no small margin, the worst business decision the company ever made.

This is no trivial comparison, as Telkom’s leadership has made some spectacular blunders over the lifetime of the company.
 
To add insult to injury is that all that money was wasted and stolen, practically just thrown way, there just wasnt anyone in charge at that time, very sad
 
Not this crap again.
Don't be mean, mybb wouldn't rehash an article from 2022 for clicks.

2022:
Vodacom, which launched South Africa’s first GSM network in 1994, was a joint venture between Telkom (50%), Vodafone (35%), and Venfin (15%).

In 1996, Vodafone and VenFin sold a 5% stake in Vodacom to a BEE company, Hosken Consolidated Investments Limited (HCI), for R118 million.

In 2002, HCI sold its 5% stake in Vodacom back to Vodafone and VenFin for R1.5 billion. The 1,171% profit is one of the most lucrative BEE deals in history.

2024:
Vodacom, which launched South Africa’s first GSM network in 1994, was a joint venture between Telkom (50%), Vodafone (35%), and Venfin (15%).

In 1996, Vodafone and VenFin sold a 5% stake in Vodacom to a BEE company, Hosken Consolidated Investments Limited (HCI), for R118 million.

In 2002, HCI sold its 5% stake in Vodacom back to Vodafone and VenFin for R1.5 billion. The 1,171% profit is one of the most lucrative BEE deals in history.
Nee man Jan, what's this chatgpt recycled journalism.
 
Bit of a twisted view of the world that really only matters to execs ego. The question is what was best for shareholders. And the unbundling was best for shareholders. The question is if Telkom owning part of Vodacom would have been worth more than the sum of the parts. And that is definitely not the case - holding companies tend to trade at a discount of assets.

Would Vodacom have been able to execute so well (financially) if they were coupled to Telkom. I very much doubt it.
 
I agree, if vodacom had 50% of the idiots that telkom have, would it be where it is today.
 
I agree, if vodacom had 50% of the idiots that telkom have, would it be where it is today.
Well according to the Pareto Principle 80% of Vodacom can be idiots and the the other 20% will carry them through.
 
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Bit of a twisted view of the world that really only matters to execs ego. The question is what was best for shareholders. And the unbundling was best for shareholders. The question is if Telkom owning part of Vodacom would have been worth more than the sum of the parts. And that is definitely not the case - holding companies tend to trade at a discount of assets.

Would Vodacom have been able to execute so well (financially) if they were coupled to Telkom. I very much doubt it.
It's more about Telkom. If they didn't offload their Vodacom stake they couldn't compete against it and we wouldn't have had Telkom Mobile. It was the right move from a competitor standpoint. What happened afterwards is where the issue is. Telkom neither excelled in fixed line nor mobile because of bad management and an unfavourable regulatory regime. BEE and bad management was their worst mistake.
 
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