Will Telkom’s 50% share of Vodacom be
affected by Neotel?
Not really.
‘Neotel will compete for wireless broadband, but this has
never been a major revenue generator anyway. Analysts have
often said that Telkom's 50% stake in Vodacom accounts for most
of the fixed-line operator's market capitalisation’ (No terrors
for Telkom, McLeod, Financial Mail, 5 May 2007).
In other words, Vodacom, ‘the jewel in Telkom’s crown,’
will largely be left unaffected by Neotel.
Do Telkom shareholders need to
panic?
Not yet, judgement day for Telkom is coming but it’s
predicted that it won’t be soon.
‘Neotel has a long way to go before it poses a threat to
Telkom's core revenues’ (No terrors for Telkom, McLeod,
Financial Mail, 5 May 2007).
In other words, Telkom’s shareholders don’t need to lose
sleep over Neotel. Or do they?
ADSL
South Africa (Broadband South Africa) is convinced that
thousands of fed-up consumers will pitch up to play on Neotel’s
side as soon as they get the chance. The Telkom giant might be
crippled sooner than expected.

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