This year is set to be crunch time for the fixed-line operator, as it is faced with some critical decisions that will determine its future in the highly competitive telecoms market. <\/p>\n
Recent news that Oger Telecom, which is owned by Lebanese-controlled Saudi Oger, has made an offer to Telkom did not surprise the market as the rumours of a possible tie-up with Oger through its 60 percent ownership of Cell C had already started doing the rounds last year.<\/p>\n
Although this move could pave a way for Vodafone to increase its stake in Vodacom, some analysts are sceptical about the feasibility of a partnership between Cell C and Telkom.<\/p>\n
Dobek Pater of African Analysis questioned whether Cell C would be any more successful in the local market if Saudi Oger owned both Cell C and part of Telkom.<\/p>\n
In addition, Telkom does not have the skills to pump into Cell C's cellular operation to make it more successful.<\/p>\n
It is difficult to see how the two operators would co-operate to sell fixed-line and cellular services in the market, when they have little or no knowledge of each other's operations.<\/p>\n
However, Oger Telecom could bring in its own expertise, since it has both fixed-line and cellular operations in Turkey.<\/p>\n
Moreover, if Telkom and Cell C's partnership does go ahead, Telkom will be partnering with a cellular operator generating no profit at present.<\/p>\n
It will have to improve Cell C's performance – probably at high cost.<\/p>\n
Another snag for Telkom is that Cell C does not have its own high-speed internet and 3G network yet. It would have to expedite the activation of its 3G network to be more competitive against MTN and Vodacom, particularly on high-speed data and multimedia services.<\/p>\n
This was probably not a viable scenario for Telkom, said Pater.<\/p>\n
Whatever Telkom decides on this year, it still remains an attractive asset to most companies on an acquisition prowl.<\/p>\n