Worst business decision in SA telecoms history

If I recall the main Telkom business at the time was bleeding cash, so they had to sell it to stay afloat.
 
Sapphiron said:
If I recall the main Telkom business at the time was bleeding cash, so they had to sell it to stay afloat.
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Don't think so, think it was so they could (properly) start up 8ta/Telkom Mobile, could have just kept the shares and not expanded and would have been fine.

Still don't think it was the worst business decision, the company is doing fine with Telkom Mobile.
 
Why were they so desperate
They could have negotiated for a much higher amount
 
Sapphiron said:
If I recall the main Telkom business at the time was bleeding cash, so they had to sell it to stay afloat.
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Yup they were losing market share to the mobile operators and for good reason. Telkom needed to expand at all costs. Their shareholder agreement prevented them from competing against Vodacom.

You also can't look at unrealised returns but rather how much they got from Vodacom versus from Telkom Mobile and remember that it was those potential direct returns that caused them to pull the trigger. If they didn't do it and went under we might have been saying the same thing about not selling. I'd rather describe Naspers' decision to sell MTN as the worst decision in telecoms history.
 
Swa said:
Yup they were losing market share to the mobile operators and for good reason. Telkom needed to expand at all costs. Their shareholder agreement prevented them from competing against Vodacom.

You also can't look at unrealised returns but rather how much they got from Vodacom versus from Telkom Mobile and remember that it was those potential direct returns that caused them to pull the trigger. If they didn't do it and went under we might have been saying the same thing about not selling. I'd rather describe Naspers' decision to sell MTN as the worst decision in telecoms history.
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I don’t think you quite grasp the concept the author is trying to make. Naspers sold MTN but bought into 10cent how is that a bad decision. Both would be better but as far as deals go, it’s not bad or a mistake.
 
Bradley Prior said:
Worst business decision in SA telecoms history

Telkom’s decision to sell its stake in Vodacom ranks as the biggest business blunder in South Africa’s telecommunications market.
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I said that many years ago, if remembered correctly I was laughed off, not just Telkom, but for the users(taxpayers) and country as well.....Look at all the duplication of resources today, its all well if you have endless resources, but at 7-8Billion over the globe, that is certainly not the case, so the pain is going to be felt in future, we will see how clever the "educated" were indeed, resources belong to mother nature to begin with, at 3 Billion(50-ties this argument has no value, only a very few would see the problem coming then) not to money or the concept there of in play, there are resource boundries in a closed system like Planet Earth, there comes a time when you cannot eat or drink money, no matter how much you print.
 
Pak Fa Fui said:
I don’t think you quite grasp the concept the author is trying to make. Naspers sold MTN but bought into 10cent how is that a bad decision. Both would be better but as far as deals go, it’s not bad or a mistake.
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Oh I get it but not everyone sees it as the worst decision. It might not have been the best but that doesn't consider the whole situation. Naspers didn't sell MTN to buy into 10cent. They sold it at next to nothing (relatively) because back then telecoms was an expensive endeavour with little returns. Nobody in Naspers was able to foresee how MTN and Vodacom would dominate telecoms and 10cent wasn't even in the picture.
 
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