Telkom in major data centre play

Telkom is potentially looking at announcing a partnership with a hyperscale computing provider soon, CEO Serame Taukobong has told MyBroadband.

Hyperscalers include players such as Alibaba, Huawei, Oracle, Facebook, Amazon Web Services, SAP, Microsoft, and Google.

Two of the world’s biggest cloud computing players — Amazon and Microsoft — have launched data centres in South Africa.

Huawei has also launched a local data centre, while Oracle, SAP, and Acronis have announced Johannesburg-based cloud regions for their services.

Africa Data Centres also recently revealed that it was selected for the first African Google Cloud Interconnect.

Taukobong revealed Telkom’s high-level plans in response to questions about the market’s reaction to its annual results, with the company’s share price falling by as much as 14.8%.

At the time of publication, Telkom’s share price was R36.24 — 10.8% lower than Tuesday’s opening price of R40.59.

“What the market has certainly been expecting is for us to announce some big-ticket items [to unlock shareholder value],” Taukobong said.

“To be fair, it’s a conversation that we’ve had with the market.”

The launch of a hyperscaler in its data centres is one of three things Telkom expects to announce soon to unlock that value, Taukobong told MyBroadband.

“Hopefully, in the next 3–6 months, we’ll drop some significant announcements on real partnerships that start to materialise the value unlock journey,” he said.

The two other announcements are around BCX and Openserve.

“We are looking at getting a strategic partner for BCX to drive scale and capability,” said Taukobong.

He also said Telkom had completed the balance sheet separation of Openserve.

This will allow Telkom’s wholesale and networks division to attract better funding and be more aggressive in the market.

Upstart Vumatel has eaten Telkom’s lunch in the fibre-to-the-home arena since it arrived on the scene in 2014.

Telkom reported in its annual financial results that its fibre network passes 839,691 homes with a connectivity rate of 46.3%.

On the same day Telkom announced its annual financial results, Vumatel revealed in a presentation to Remgro shareholders that its network passes 1.4 million homes with an uptake rate of 33.8%.

Therefore, Vumatel has over 473,000 FTTH customers connected to its fibre network, while Telkom reported 389,109 home fibre subscribers.

Now read: South Africa’s explosion of cloud computing providers

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Telkom in major data centre play