Telkom to focus on urban areas

Telkom has no plans to build mobile network infrastructure in sparsely populated rural areas, since there is already sufficient capacity there, says Attila Vitai, its consumer business head.

Telkom has no plans to build mobile network infrastructure in sparsely populated rural areas since there is already sufficient capacity there, says Attila Vitai, the parastatal’s consumer business head.

Its largest rivals, Vodacom and MTN, have spent vast sums on ensuring there is ubiquitous voice and data connectivity across SA.

But Telkom, which has a 2G and 3G roaming agreement with MTN, believed it would be a “waste of national resources” if it were to add more towers in nonurban areas, Vitai said.

MTN and Vodacom’s rural base stations were probably significantly underutilised.

“It’s better that we use the infrastructure that’s already being deployed there than allowing our competitors to have underutilised infrastructure and then we compound the problem by building even more. It’s better for us to pay Vodacom or MTN [roaming fees] and it’s better for them.”

Vitai said Telkom had been “investing heavily” in its urban network, having built more than 1,000 new sites in the past year.

In the six months to endSeptember, Telkom invested R1.2bn in its mobile business and increased its footprint by a quarter to 3,445 sites. Mobile service revenue rose 43.2% thanks to its active subscriber base growing by more than a third.

The group would be building at a faster rate were it not for Vodacom and MTN owning most of the tower real estate, Vitai said.

“If they [Vodacom and MTN] allowed us onto their sites it would be an awful lot easier, but for obvious reasons — you can’t expect turkeys to vote for Christmas – they don’t want to let us onto their sites because they know we will be even more aggressive in the marketplace,” Vitai said.

To cope with “high demand” for its mobile products and services, he said, Telkom was in the middle of a one-year programme to open 30 new shops in urban areas.

“We want significant growth going forward,” Vitai said.

The mobile business’s “big success story” was the result of a culture overhaul at the parastatal, its positioning as an operator for data-heavy users and its more aggressive approach.

IT’S BETTER THAT WE USE THE INFRASTRUCTURE THAT’S ALREADY BEING DEPLOYED THERE