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Telkom's not too
worried
ADSL
South Africa (Broadband South Africa), 10 May
2007
It seems that Telkom is not too
worried about Neotel’s chances of dethroning the giant
soon.
‘Telkom chief financial officer
Kaushik Patel told analysts at a recent investor day that the
company expected to lose only 10% of its market share in fixed
lines over the next three to five years, down from an earlier
forecast of between 10% and 15%’ (No terrors for Telkom,
McLeod, Financial Mail, 5 May 2007).
In other words, Telkom expects to
lose less market share to Neotel than earlier
anticipated.
Can you give us a market
analyst’s take on this?
Sure.
‘…10% is a fair estimate but
points out that, as prices come down because of competition,
the overall market will grow at the same time. So, while it may
lose market share, Telkom could actually grow its business’ (No
terrors for Telkom, McLeod, Financial Mail, 5 May 2007). This
is according to BMI-TechKnowledge Market Analyst, Denis
Smit.
In other words, Telkom might
actually gain instead of losing any of its market share if
fierce competition between Neotel and Telkom sees prices going
down instead of up.
Will Neotel have a
fighting chance?
For sure.
According to Smit Neotel is run
by an “exceptionally talented management team” (No terrors for
Telkom, McLeod, Financial Mail, 5 May 2007). Also, “Neotel will
do very well. They're a smart outfit and know not to over
promise and under deliver” (No terrors for Telkom, McLeod,
Financial Mail, 5 May 2007).
In other words, Neotel
has a great management team in place and won’t make
Telkom’s mistake “to over promise and under
deliver.”
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