Telkom exploring opportunities beyond SA
According to Telkom CEO Papi Molotsane, the focus is on data acquisitions and fixed/mobile opportunities. He says a detailed evaluation process is followed on each opportunity to ensure it is a strategic fit, all risks and resource requirements are understood and the potential returns exceed Telkom’s minimum requirements.
The telecommunications group, which still maintains a monopoly in South Africa although a second fixed-line network operator licence has been granted by the government, recently confirmed that it had been approached by Portuguese investors to participate in a rival bid for a stake in Portugal Telecom SGPS SA.
However, it said it had decided not to pursue the opportunity – one of many it said it had been approached about.
In other areas, the group says the evolution to an IP centric network is a business imperative which cannot be delayed.
"It is imperative that the company increases investment in its network to reduce the cost of operating the network and to be able to deliver fully converged products and services to meet customer needs in a rapidly changing technological environment," says Molotsane.
Acceleration of Telkom’s broadband penetration is a critical element of this strategy. Molotsane says the technology has reached critical mass and is set to become the technology of choice as demonstrated globally.
"The evolution to a Next Generation Network is a phased approach based on sound commercial criteria and will be required to exploit new opportunities in the ICT solutions market and bring down the cost of telecommunications in South Africa.
"The first phase, expected to last 3 years, is mainly concentrated on enabling the network for broadband services. The second phase is the conversion of existing products and services to NGN. Depending on customer demand and profitability, this phase is expected to be complete by 2015 when Telkom should have a predominantly IP network with most products and
services on the new platform."
Molotsane says that delaying the investment will result in lost opportunities and erode Telkom’s ability to retain existing customers through new services, features and functionality.
"Given the centrality of ICT to economic growth and social development, Telkom remains strategically important to the achievement of national objectives and will continue to invest significantly in the development of a viable and vibrant marketplace.
"In this context, Telkom is also exploring opportunities outside South Africa’s borders where there is potential for growth," Molotsane adds.
He says that Telkom’s vision is to be a leading customer and employee- centred ICT solutions service provider.
"Telkom is focused on balancing the needs of all stakeholders to ensure long-term sustainable and profitable growth of the business for shareholders.
"The accelerated liberalisation of the market, in particular the implications of the Electronic Communications Act, the emergence of new technologies and customer demand is clearly material to Telkom’s strategic intentions.
"Telkom believes that it is strongly positioned to compete in a liberalised market. Customer service excellence through a skilled and dedicated work force, greater product and service choice as well as added value for customers will ensure long-term value creation.
"Telkom will also pursue opportunities to provide the full spectrum of ICT solutions including voice, data, video and Internet services increasingly through broadband penetration," says Molotsane.
To ensure that Telkom can sustain the creation of value relative to developments in its dynamic market environment, he adds, management have determined certain shifts in strategic emphasis.
He says Telkom will focus on the following imperatives to sustain long- term value creation for all its stakeholders:
· Investing in the development of employees to maintain competitive advantage
· Enhancing customer satisfaction through customer centricity
· Retaining revenue and generating growth
· Evolving to a next generation network in order to support profitable growth through prudent cost management
· Repositioning Telkom stakeholder management to create healthy external relationships.
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