Vumatel vs Openserve - R18.5 billion market cap vs R44 billion valuation

Jan

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David versus Goliath — A tale of two telecommunications companies

On Tuesday, 14 June 2022, Telkom released its annual financial results for the year ended 31 March 2022, revealing a company struggling to grow.

Revenue was down 1.1% to R42.8 billion, and earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased 0.5% to R11.9 billion.
 

ToxicBunny

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So you're saying that Vodacom got swindled?

Nah, the indication is more that Telkom is significantly undervalued but for a very good reason. The business itself is fundamentally underperforming for the asset base that it has in my opinion.
 

Polymathic

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Nah, the indication is more that Telkom is significantly undervalued but for a very good reason. The business itself is fundamentally underperforming for the asset base that it has in my opinion.
Problem with Telkom is that government is one of the largest shareholder and there's always a risk of them dumping shares.
 

ToxicBunny

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Problem with Telkom is that government is one of the largest shareholder and there's always a risk of them dumping shares.

I actually have a feeling that Telkoms valuation would climb fairly quickly if they did dump their shares.
The market is no longer entirely tolerant of Government "controlled" entities in the fashion that it would have been 10 or 20 years ago.
 

rpm

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Nah, the indication is more that Telkom is significantly undervalued but for a very good reason. The business itself is fundamentally underperforming for the asset base that it has in my opinion.
Exactly. Telkom has tremendous assets and if it can unlock this value shareholders will benefit big-time. However, it is not easy with the government (with PIC) as the main shareholder.
 

ToxicBunny

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Exactly. Telkom has tremendous assets and if it can unlock this value shareholders will benefit big-time. However, it is not easy with the government (with PIC) as the main shareholder.

As with most things in this country, government is the handbrake :p
 

ambo

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Exactly. Telkom has tremendous assets and if it can unlock this value shareholders will benefit big-time. However, it is not easy with the government (with PIC) as the main shareholder.
Telkom are doing very poorly at monetising their infrastructure assets. They still explicitly or implicitly (due to poor service delivery) don't derive much revenue from long-haul connectivity, colocation in exchanges and other areas where they hold most of the available national assets.
 
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