Fixed-line telephone operator Telkom (TKG) continues to explore opportunities outside its borders, particularly in other African markets, Telkom CEO Pai Molotsane says in the group’s latest annual report.
"A number of options, each with its own advantages and disadvantages, are available in the form of acquisitions, privatisations, joint ventures and management contracts," he said.
He added that a detailed evaluation process will be followed to ensure all risks and resource requirements are understood, and the potential returns exceed Telkom’s stringent investment criteria.
"Moreover, a strong business case will determine where Telkom chooses to invest, either to grow its ability to service customers’ needs across the ICT value chain, or to grow into new geographical markets where Telkom can leverage its competencies effectively and profitably."
Molotsane said Telkom was committed to maintaining its financial performance at world-class levels as it moved into a challenging new phase of development.
In the year ahead, Telkom expected fixed-line revenues to be impacted by tariff reductions, although increased volumes were expected to have a partially offsetting effect, increased competition and the migration from dial-up to ADSL, and the introduction of cost-based interconnection.
"Telkom’s traditional position is clearly under pressure. Telkom may not lose potential revenue opportunities and may not lose customers to other operators because it has not kept up with evolving needs or new technologies. Telkom believes it has sound fundamentals and a focused strategy, which signals Telkom’s intent to maintain long-term profitability by organising the business to compete fiercely on value," Molotsane wrote.