Great ex­pec­ta­tions

Finweek English Edition - - HOUSE VIEW - BY MOXIMA GAMA

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.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.