Telkom’s big mobile lie

Vodacom CEO Shameel Joosub said Telkom does not want Vodacom and MTN to get more spectrum because it wants to maintain its competitive advantage.

Speaking to The Nielsen Network, Joosub said Telkom had accused Vodacom and MTN of being a duopoly to limit their ability to get additional spectrum.

This, he said, is a red herring to take the focus away from the reality about telecommunications in South Africa.

Joosub explained that there are three components when you build a mobile network.

  • Building mobile towers.
  • Building a fibre network to carry traffic from the towers.
  • Spectrum, which is needed to provide mobile services.

Telkom has a big advantage in two of these components. It has the biggest fibre network in South Africa and has more spectrum than its competitors.

Joosub said Telkom’s decades-long monopoly in the fixed-line market prevented anyone from building fibre networks.

Telkom has therefore developed an unmatched fibre network to carry traffic from its mobile towers.

Telkom also has significantly more spectrum than other mobile players, which gives it a big advantage over its rivals.

To maintain its competitive advantage, Telkom’s modus operandi is to delay the spectrum auction as long as possible.

“They’ve been successfully delaying the allocation of spectrum for years and is now challenging the process again,” he said. “This is disappointing as we need to get on with the spectrum auction.”

Armed with more spectrum, Vodacom and MTN will cut data prices to make the most of their network investments. It will put pressure on Telkom to do the same, which will hurt its bottom line.

Telkom would like to avoid this situation, and delaying the spectrum auction is a logical step to avoid a big decline in data prices.

To go ahead with the spectrum auction, the Independent Communications Authority of South Africa is trying to reach a negotiated settlement with Telkom.

If the regulator is not successful, the matter can be stuck in the courts, which will delay the process further.

MyBroadband asked Telkom for comment about Joosub’s allegations, but the company did not respond by the time of publication.

Now read: Real reason Telkom is fighting against the spectrum auction — and it is not surprising

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Telkom’s big mobile lie