Telkom in 2010 and beyond

ADSL South Africa (Broadband South Africa), 19 April 2007

Will the Telkom of 2007 be the same Telkom in 2010 and beyond? This is the question that one can ask since it’s as clear as daylight that Telkom is heading along the same road as British Telecom and Australia’s Telstra. This is true except for obvious differences concerning the time element and other ‘…minor details here and there...’ (A blueprint for Telkom’s future, Tarrant, Moneyweb, 12 April 2007).

‘The events in the recent history of these foreign companies will show us pretty much exactly what will happen at Telkom over the coming years’ (A blueprint for Telkom’s future, Tarrant, Moneyweb, 12 April 2007).

In other words, to see what’s going to happen with Telkom in the next couple of years or more, we just need to look at the stories of telecoms giants like BT and others.

What’s going to happen?

Telkom ‘…will be split. At first into two units, but ideally it will end up as four operating entities” (A blueprint for Telkom’s future, Tarrant, Moneyweb, 12 April 2007).

It will look something like this:

• Telkom  – ‘The retail arm of the telcoms giant retains the Telkom name. It's a name we love to hate, but has tremendous brand equity. Consumers never deal with any other part of the fixed-line operator and the much-bandied about idea of "customer-centricity" is key. The chief of (the new) Telkom's number one priority is customer service. Employees care about customers and will do anything to help.
  
  This division would be run as: Telkom Closer (also a great brand) which handles all the voice business. Existing customers would be migrated to Closer plans with bundled free minutes. Telkom Internet: the internet service and broadband provider. Customers will pay one bill to Telkom Internet for broadband. Simple. Telkom Media falls within this group, but operates as a separate company. Much like BT Vision, IPTV (internet protocol TV) drives revenue and sees this company become a player in the broadcast and content market. It also provides a first-class alternative to Multichoice's DStv’ (A blueprint for Telkom’s future, Tarrant, Moneyweb, 12 April 2007).
  
  To sum up: The Telkom name will be retained, customer service will be improved, one bill broadband solutions will be a given, et cetera.

• T2  – ‘The wholesale arm of Telkom relaunches as a separate company, with a new name. The brand recognition of this company is not at all important - this entity deals in bandwidth. T2 is responsible for wholesaling connectivity to business and internet service providers. Telkom Business is reshaped as T2 Business. Costs are stripped down, and efficiency becomes key. This company will compete head to head with Neotel, government's Infraco as well as tier one ISPs (like Internet Solutions) in some areas’ (A blueprint for Telkom’s future, Tarrant, Moneyweb, 12 April 2007).
  
  To sum up: Telkom’s wholesale arm relaunches as a separate company with a new name, deals in bandwidth, responsible for wholesale connectivity, Telkom Business reshape as T2 Business, efficiency becomes the key, head-to-head competition with the likes of Neotel, et cetera.

• Network Services – ‘Network Services owns, maintains and develops the access network which links residential consumers and business to the networks of South Africa's communication providers. The unbundling of the local loop forces the fixed-line operator to spin off this division. Network Services offers customers access to all parts of the local loop as well as backhaul networks (including wholesale line rental). Network Services runs the new next generation network. Network Services installs your phone line and fixes faults but you never contact them, it is contracted by Telkom as a service provider. All the current fixed-line giant's Colt bakkies and techies now work for Network Services. The South African Internet Exchange (or SAIX) is also housed in this company, along with connections to other parts of the world via undersea cables (or satellites)’ (A blueprint for Telkom’s future, Tarrant, Moneyweb, 12 April 2007).
  
  To sum up: Network Services owns, maintains and develops access network, offers access all parts local loop as well as backhaul networks, new next generation network, installs your phone line and fixes faults but you never contact them, contracted by Telkom, techies work for Network Services, SAIX housed in Network Services, et cetera.

• TKG Connexion – ‘TKG Connexion (call it what you like) is the company's consulting and ICT business solution entity. Formed through the somewhat controversial pending acquisition or the takeover of a smaller business (with the integration of overlapping services that exist in the fixed-line company), this company provides business solutions. It competes with others in the market like Dimension Data. Core group services will obviously continue to be housed in the listed holding company, The Telkom Group’ (A blueprint for Telkom’s future, Tarrant, Moneyweb, 12 April 2007).
  
  To sum up: Consulting and ICT business solutions entity, core group services still housed in The Telkom Group, competes with the likes of Dimension Data, et cetera.

What about Vodacom?

‘It continues, running at over an arm's length away from the fixed-line company. Results prove it's worked very well so far’ (A blueprint for Telkom’s future, Tarrant, Moneyweb, 12 April 2007).

In other words, it’s business as usual for Vodacom and it pays off.

While the above scenario might look like something totally removed from reality we tend to agree with Tarrant from Moneyweb: ‘…In two or three years' time, Telkom (as we now know it) will not exist in its current form…’ (A blueprint for Telkom’s future, Tarrant, Moneyweb, 12 April 2007).

In other words, the old will be gone and the new will be here sooner than expected.

ADSL South Africa (Broadband South Africa) welcomes Tarrant’s take on things pertaining to changes we can expect at Telkom within the next 2-3 years.