Overcrowded market
Telkom has it altogether tougher. The company is following the same strategy of diversification, but it is less agile and hampered by a legacy infrastructure proving costly to overhaul.
Much has been done to streamline internal processes but that is not enough. It must expand its range of IT skills and facilities to offer the combination of services customers now require.
Combining voice and IT services is a no-brainer. But rather more speculative is Telkom’s move into the pay-TV arena. Its business plan suggests it will lose R1bn a year for the next three years.
Almost everybody watches TV , of course, but how many will pay extra for the dubious privilege? The market looks set to become overcrowded, it is not a field that Telkom understands, and the upfront costs are scary.
Unless Telkom leaves most of the operations to well-selected partners rather than tackling them itself, this could prove a diversification too far.
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