Goodbye 40Mbps

Telkom’s been making the news recently, among other hot topics of discussion around our fixed-line provider is “The KT deal”. Now, our brilliant government has decided to intervene in the proposed takeover by Korea Telecoms. We got to find out this week as speculations went around that government is considering re-nationalising Telkom …

Don’t know if some people think it’s a good move (and why they do); I don’t know how Telkom was back in the days (I was still too young to notice), but all I remember was that Telkom once went in many of the rural areas empowering people with telephone lines [which is probably irrelevant to my point].

I think of government’s deliberations as likely bad for the development of our telecoms industry. Even though we have Swooosh, 120GIG BIG, MoFaya and the yellow guys, none of the capacities we are getting would be possible if it weren’t for that cable that Telkom uses. My worry is that government has kinda failed to appoint the right persons in most of its parastatals, as I type this only one light is on in the house, does Eskom ring a bell? Telkom has great people I reckon, from the guys on the ground to the ones making decisions at the top. Yes there is government influence, but at least we (investors) have a voice if government or anyone tries rubbish (the share price reflects reaction to decisions to an extent).

So with government likely to push the likes of Khulubuse in power, what gets to happen to those excessive bonuses? Would they care or even know about King III?

We live in an era where our broadband is pricey compared to the rest of the world, we are seeing declines as more competitors join the market, but the potential bottleneck is Telkom. I fear that if government takes total control of it, its bottom line might start being eroded by careless future management, which will affect the amount spent on infrastructure. That will potentially kill the planned 2Mbps basic and the 40Mbps ADSL.

I just hope that if this talk isn’t just baseless media speculation, that at least they keep sis Pinky as the CEO and don’t plant a Richard Mdluli into our dear Hellkom. Only time shall tell anyways