Telkom’s ‘Competitor Sensitive’ ADSL information
While Telkom is not shy to boast about its multi-billion Rand profits, it is less inclined to share information on issues like the number of fixed lines, number of ADSL users, its ADSL installation backlog or even the ADSL ready exchanges.
Telkom has always been unwilling to give out information like the contention ratios of its ADSL service, but it used to be more open regarding issues like the number of ADSL users or even the number of operational fixed lines. But it seems that the monopoly has clammed up.
And the reason for not giving out this information? According to Telkom this is, for the most part at least, competitor sensitive information.
This is a rather interesting turn of events since they proudly supplied the number of ADSL users at their recent results presentation for investors. It is unlikely that this particular piece of information is ‘competitor sensitive’.
One possibility is that Telkom do not want the media to keep tabs on their slow ADSL growth and the fact that they are lagging behind on the ADSL promises made by the CEO.
Telkom’s ADSL and Broadband promises
When it comes to ADSL, Telkom is particularly sensitive. This may be due to the fact that Papi Molotsane, Telkom’s CEO, promised a 15% – 20% fixed line penetration rate by the end of 2008 at last year’s interim results presentation.
Telkom quietly tried to give themselves until 2010 in recent reports ( http://www.telkom.co.za/minisites/ir/analystdaypres_2006.html ) and maintained that Molotsane always said that the broadband milestone will be achieved with in the next three to five years. Unfortunately for Molotsane and Telkom many journalists were present at the interim results presentation and from the reports Molotsane clearly said three years.
These reports include articles from Moneyweb ( http://www.moneyweb.co.za/shares/ict_sector/556124.htm ) which reported that “Telkom wants a million broadband customers in the next three years” and Finance24 ( http://www.fin24.co.za/articles/default/display_article.asp?Nav=ns&ArticleID=1518-24_1834153 ) which clearly states that “growing market penetration of ADSL from two percent to between 15 and 20% in three years as Molotsane said during his presentation”
Current Growth Rate
Over the last financial year the number of ADSL users grew from 58 278 to 143 509. This equates to a yearly growth of 85 231 or average monthly growth of 7 103.
To reach 680 000 ADSL users by the end of 2008 as Molotsane promised, the growth rate should be around 16 000 new subscribers per month or around 190 000 new customers per year. The current installation rate must therefore be doubled to reach this target.
Installation backlog
There is currently a significant ADSL installation backlog and the figure being bantered around is 27 000. Many people have reported that they have to wait for months for their ADSL service, which is an indication that Telkom continues to struggle to deliver services to potential customers.
Molotsane has indicated that they are looking at both strategic partnerships and self-installation to reduce installation times, but like his customer-centric banter this is nothing new.
Where to from here
Accurate, up-to-date information about any service is of great value to consumers, and Telkom’s inability or unwillingness to supply such information regarding ADSL is regrettable to say the least.
While Molotsane may feel strongly about turning Telkom around and making it customer centric, his ability to actually achieve his goals with the monopoly is questionable. Investors are also doubtful and it shows in the fall of Telkom’s share price which has fallen around 20% since March this year.
While Molotsane’s aims of developing a world class network and creating a truly customer centric company are admirable, he has not achieved much in this arena. He has however succeeded in scaring some investors with his CAPEX plans coupled with a serious lack of tangible results in the customer satisfaction department.
The solution is however far easier than one may think, especially for Molotsane. Simply practice what you preach! And here Telkom and Molotsane can start with asking customers what they want, delivering on their promises and getting accurate information out regarding their services and what users can expect from Telkom.
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