Broadband, not voice, is 8ta’s future
Telkom is pinning the future of its mobile arm on broadband. By Duncan McLeod.
The primary focus of Telkom’s mobile arm, 8ta, will in future be on providing next-generation mobile broadband more than voice services, the acting CEO of the mobile unit, Jacques Schindehütte, said on Friday.
Schindehütte, who is also Telkom’s group chief financial officer, said the focus for 8ta will be on delivering both third- and fourth-generation (3G and 4G) mobile broadband and future investments in the mobile network will be tailored with that in mind.
He made the remarks at Telkom’s annual results presentation in Rosebank in response to a question from a financial analyst about 8ta’s ability to compete in light of Cell C’s recent reduction in both prepaid and contract voice tariffs.
“On the mobile voice side, the ability to compete against likes of Vodacom and MTN is strongly linked to the on-net base you have,” Schindehütte said. “That’s where you make big money as a mobile operator. For us and the other small player, to think we can compete on price when it comes to voice is a race we can only lose.”
He said that 8ta had to be “competitive” in the voice market and offer a “value proposition” to customers, but that “is not where we are going to try and win the race”.
“The business we can still compete in is if we build a 3G and 4G network,” Schindehütte said. “It will be on data side, where we can link capability on fixed lines and that’s our strategy. It’s slightly easier because we have a compelling offering if we combine the fixed line because we can give a superior experience on broadband.”
He said there was “very little difference” between a fixed-line network and a mobile network and Telkom ought to “stop thinking about these in such extreme pockets”.
In terms of Telkom’s capital expenditure, it would spend “a lot more on building out that data network than we planned”.
“We are mindful of the risk that lies ahead of us [in mobile but], with our fixed-line colleagues, we believe we have a real chance to give the big players a run for their money.” — (c) 2012 NewsCentral Media