WILL TELKOM MEET its plans to roll out fibre broadband to a million homes by 2018? The jury is out, but it certainly would be an extraordinary feat, given that it currently only has about 38 000 fibre-tothe-home (FTTH) customers. Speaking at Telkom’s annual Satnac conference on 8 September, CEO Sipho Maseko said the group expects to have 70 000 FTTH customers by the end of the year, and a massive 400 000 by 2017.
The focus on FTTH is certainly a move in the right direction for a company that’s better known for making strategically disastrous mistakes (anyone remember the R7bn-odd it lost in Nigeria with its Multi-Links venture?). To put the target into context – it took Telkom 13 years to reach a million homes with its ADSL service, according to Mybroadband.co.za. But there was a crucial difference: in the case of ADSL, the copper network infrastructure already existed; the FTTH infrastructure is still being rolled out.
Telkom is also facing competition in the FTTH (and fibre-to- business) space. Companies such as Dark Fibre Africa, Vumatel and Link Africa have already started rolling out i nfrastructure in suburbs in major metropolitan areas. Vumatel, which started its operations a year ago in Johannesburg’s Parkhust, said in August that it expects to have extended its fibre network to over 100 000 homes by the end of 2016.
Other focus areas for Telkom, which has been struggling to successfully diversify its business from its declining fixed-line business, i nclude expanding its ICT services following the merger with Business Connexion, which was approved by the Competition Tribunal in August. The company has also struggled to grow it s mobile operations , with the Competition Commission blocking a plan to extend its roaming agreement and outsourcing its mobile infrastructure to MTN. Telkom i s encountering some resistance at R67.50/share, but breaching that level could propel an advance to R83/ share in the near to short term.