The Telkom tale - From a dominant monopoly to begging for help

Hanno Labuschagne

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The Telkom tale - From a dominant monopoly to begging for help

Two decades ago, Telkom was untouchable. It had a legally protected fixed-line monopoly, it owned half of the country’s largest mobile operator, and it was printing money.

Fast forward twenty years and things have changed. Dramatically. It is rapidly losing fixed broadband market share and it is struggling to compete in a saturated mobile market.

The company is finding itself in such a challenging financial position that it is retrenching thousands of workers to cut costs.
 

que_botic

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Feb 16, 2015
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The biggest beneficiary of the regulatory environment was Vodacom, throughout the period the article addresses, Vodacom had huge asymmetrical call termination rates. Telkom was a bloated, inefficient SOE at the time and government refused to run it on a commercial basis, spending Vodacom super profits on salaries of the unemployable. But it was the regulatory environment which caused the SA taxpayer and Telkom the most harm. Asymmetrical call termination rated were in effect a direct subsidy to pump up Vodafone's never ending super profits. While Vodacom was making super profits, Knott-Craig managed to periodically convince the regulator to increase the termination rates. This was aided by regular reinforcement of the need for this by articles published here and on other ZA tech news sites. Sadly, the government bungled at every step. Vodacom was severely undervalued due to the governments own constant threats to take everything away, burn it all to the ground or change the law under everyones feet, handily keeping competition off the table and super profits charging forward. Yet when given the opportunity chose not to buy the available shares (Possibly because they were owned by Rembrandt Trust, I think they had a budget surplus and low debt in 2006). Their actual actions were to increase the superprofits through regulation. After years of superprofits, the shares in Vodacom that the government ended up with from Telkom's previous disposal were sold to the PIC (themselves) by Pravin Godhan to bail out Eskom for the very last time we were told back in 2015. That 23 billion was transferred to Brian Molefe and Anoj Sing, the CEO and CFO of Eskom who immediately transferred to to the Guptas. While Vodafone tranfer their super profits to England every year, Gordhan through ineptitude helped the Guptas transfer our equity share to Dubai.
 

Rabobi

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Couldnt happen to a nicer bunch. As i said before. Die a slow painful death and may all the useless employees suffer along with it. There was not one time where a telkom employee whom i dealth with seemed like they gave a sht
 

|tera|

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I wouldn't agree that the mobile market is saturated.

This is where Telkom needs to focus.
Increase footprint. Sell bandwidth, airtime and contracts to blow out the competition.

5G is a game changer, but areas not covered seem to be covered well enough by their 4G network. Taking the mo'nice service into account, they need to start applying the same fees to their normal pricing options.

Why do we still accept paying R100 or more per Gb in 2020 on mobile networks?
It's a money draining farce.
Kick the competition out of the water.
That's how they will survive and thrive.

I do get peeved at their lack of professionalism at times though.
 

adnaanhitman

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Jun 24, 2012
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Why must we give a sh*# about a sinking pirate ship who has been pillaging from & ignoring the people they should be serving? For years they didn't give a sh*#.
And don't worry Telkom, I won't be missing from the opportunity to split your lip & skull with the sole of my Caterpillar boots when you are down. Doubt I'll be alone though.
There'll be millions out there waiting with great anticipation to do the same thing.
(licking my lips at the thought)
 

Joseph matane

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Feb 7, 2017
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"Vodacom’s agreement with Liquid Telecom to roll out a national 5G network using the latter’s spectrum in the 3.5GHz band will entrench the dominance of the country’s biggest mobile operator to the detriment of smaller players and consumers, Telkom warned on Wednesday."
if Vodacom and Liquid are allowed to go ahead with their deal, it will preclude other operators from getting access to sufficient spectrum at 3.5GHz. Icasa, he said, must therefore scrutinise the arrangement to ascertain its impact on the market.

The 3.5GHz band is seen as one of the best for the roll-out of next-generation 5G networks. Vodacom said this week it plans to leverage the Liquid spectrum through a roaming arrangement to launch commercial 5G services later this year. The deal, though non-exclusive in nature, could put Vodacom in pole position as the race for 5G coverage gets started.
This, Mahlangu said, could distort the 5G market in its infancy and leave smaller players behind before they have had a chance to compete on an equal footing.

He said operators need at least 80-100MHz of contiguous spectrum at 3.5GHz to roll-out a robust and high-quality 5G network. With Liquid’s spectrum tied up, through the Vodacom arrangement, this doesn’t leave enough spectrum in the band for other players. (Telkom has 28MHz of the band.)

Even Vodacom will only be able to launch a “watered-down” version of 5G with the Liquid spectrum, while it awaits further licensing of 5G-suitable spectrum by Icasa, he said. The bigger problem, however, is how Vodacom’s deal with Liquid Telecom pre-empts Icasa’s plan to license spectrum in the band and threatens to tie the regulator’s hands before it has even licensed additional spectrum in the band.

Regulatory scrutiny
“The only business imperative here is to pre-empt the licensing of 3.5GHz. When everyone else comes in, they will be sub-scale. Only Vodacom will have 50MHz-plus. That’s why Icasa should investigate and take a view on these deals,” he said. “They should be subjected to regulatory scrutiny… The Competition Commission and Icasa don’t pay enough attention to these things.”

He said the Liquid/Vodacom deal and similar arrangements – including the one between Vodacom and Rain and MTN and Cell C – are allowing the two biggest market players, namely Vodacom and MTN, to entrench their “duopoly”.

“In fact, it looks like a duopoly, but in the end the effect is of a monopoly. We are seeing coordinated conduct, almost monopoly behaviour by both firms.”

Icasa must “immediately” investigate the “spectrum trading deals” between the big players and smaller operators. “It must then have an informed view that must inform the licensing of spectrum. Secondly, Icasa must complete its mobile broadband inquiry. You cannot put the cart before the horse… If Icasa wants to regulate this market properly, they must complete the inquiry before they license spectrum.”

Mahlangu said Icasa “should have completed its mobile broadband inquiry before embarking into licensing” new spectrum. It should also consider opening other bands adjacent to 3.5GHz that are suitable for 5G. Simply rejigging the spectrum and moving the military out of the 3.4GHz band (which it uses for radar and has apparently signalled a willingness to do) could free up 300MHz of spectrum. “That enough for three strong players … on 5G.
 
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Sudo Panic

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May 8, 2013
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Couldnt happen to a nicer bunch. As i said before. Die a slow painful death and may all the useless employees suffer along with it. There was not one time where a telkom employee whom i dealth with seemed like they gave a sht
And what happens when those "useless employees" come looking for work a company like Telkom will have a knock on effect and will impact the lives of every citizen in this country I can guarantee you on that. What happens when they lay off a large portion of their workforce?

Don't get me wrong I want to see them up in flames just as much as you but the repercussions within that scenario would be tragic.
 

Chrissie10

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Aug 6, 2013
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I do not enjoy Telkom's downfall, but for so many years they were arrogant and literally stole from consumers.
If they sent you an account of R1000 no matter how you explain that it does not belong to you, you had to pay to keep your own Telkom service going. No refund even when found there were crosslines.
I told the manager at accounts when he told me with a sarcastic grin, " if you want to keep your line you better pay" the day will come you will have to find another job because what you doing to the clients will come back and bite you very hard.
Sorry Telkom 2 many times you took from the poor to enriched yourself.
There is still justice...it takes time but it will come.
 

Zophos

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Title says it all. Dominant Monopoly

They eliminated competition but did not give a crap about their clients.

No fcks given here. :thumbsdown:
 

uchoose

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May 19, 2009
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All those days of poor service, incompetence and i don't care attitude is now bitting you in the bum. Don't feel sorry for them. It's the workers which are going to loose, but the workers are part of the problem with their "I don't give a damn" attitude. F%*! 'em join the unemployment line. I would not employ a telkom worker, least of all a call centre worker. You have caused the down fall of telkom you useless bits of shite.
 

uchoose

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All those days of poor service, incompetence and i don't care attitude is now bitting you in the bum. Don't feel sorry for them. It's the workers which are going to loose, but the workers are part of the problem with their "I don't give a damn" attitude. F%*! 'em join the unemployment line. I would not employ a telkom worker, least of all a call centre worker. You have caused the down fall of telkom you useless bits of shite
 

Magnum

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Couldnt happen to a nicer bunch. As i said before. Die a slow painful death and may all the useless employees suffer along with it. There was not one time where a telkom employee whom i dealth with seemed like they gave a sht
F-Off....I need Fiber first. Then they can close!
 

Gozado

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Jan 13, 2019
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I would not employ a telkom worker, ...
While I get the frustrated outcry, and have had too many occasions to phone and phone, and to stand in the queues, too, there is one Telkom worker I'd really be very happy to employ.

I bought a product in a Telkom shop. The worker explained it all to me, including pros and cons of other deals, and once I'd selected what I needed based on that advice, she wrote down her direct mail address and a direct phone number (might even have been per personal mobile, not sure though). I paid, and left with all the documentation as needed.

Next day, tried to use the product, and it didn't work. I phoned. No answer. I mailed her, explaining the steps I'd taken to set up, and what was [not] happening.

Within 20 minutes she phoned me back, apologised for not having answered the phone but she'd been busy with another client, said she'd read my mail and that it had clearly been her error because she should have activated something and had forgotten to do so, said she hoped I hadn't been inconvenienced, and would I please now test everything and call her back. I tested, it worked, I called her back. She apologised again, and said that if I ever had any further queries I could approach her directly. It all worked fine after that.

Now, could Telkom please promote that woman to run the show and get things working? :)
 
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