Broadband, not voice, is 8ta’s future

Telkom is pinning the future of its mobile arm on broadband. By Duncan McLeod.

Added by Duncan McLeod on 8 June 2012.
Saved under News, Top
Tags: , , , , ,

Jacques Schindehütte

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

Share this article

  • Grant11

    This makes total sense. It is a huge tactical change from the situation under the previous 8ta MD where the gameplay was to pay distriburors a large share of revenue in an attempt to take on established competitors head on. Jacques must have realised that the “partners” got rich and 8ta lost a few billions.

Why TechCentral?

We know that as a prospective advertiser, you are spoilt for choice. Our job is to demonstrate why TechCentral delivers the best return for your advertising spend.

TechCentral is South Africa’s online technology news leader. We don’t say that lightly. We believe we produce the country’s best and most insightful online tech news aimed at industry professionals and those interested in the fast-changing world of technology.

We provide news, reviews and comment, without fear or favour, that is of direct relevance to our fast-expanding audience. Proportionately, we provide the largest local audience of all technology-focused online publishers.

We do not constantly regurgitate press releases to draw in search engine traffic — we believe websites that do so are doing their readers and advertisers a disservice. Nor do we sell “editorial features”, offer advertising “press offices” or rely on online bulletin-board forums of questionable value to advertisers to bolster our traffic.

TechCentral, which is edited and written by award-winning South African journalists, cares about delivering top-quality content to draw in the business and consumer readers that are of most interest to technology advertisers.

We’d like the opportunity to demonstrate the value of directing a portion of your advertising budget to TechCentral, whether your company is in the technology field or not. Numerous opportunities exist for companies interested in reaching our audience of key decision-makers in South Africa’s dynamic information and communications technology sector. We offer packages that will deliver among the best returns on investment available in the online technology news space.

For more information about advertising opportunities, and how your organisation can benefit by publicising itself on TechCentral, please call us on 011-792-0449 during office hours. Or send us an e-mail and ask for our latest rate card and brochure.