Corporate world wants to know future of Vodacom, Telkom

AFTER the release of their financial results, the futures of Vodacom and Telkom have come under the spotlight by analysts.

Both companies this week issued what should be their final results as “unhappily married companies” but analysts were far more interested in their futures than in their performances of the past.

Vodacom grew its customer base during the period while Telkom profits continued to rise.

Frost & Sullivan analyst Spiwe Chireka warned that Vodacom’s growth by expanding its data services, which it announced this week, may prove a short-lived advantage.

“Competition in Africa is intense, and the operator might have to reduce its voice and data tariffs,” she said.

An analyst forecast a brighter future for Telkom, the fixed line operator.

“Telkom’s $63m purchase of MWeb’s internet activities beyond SA was a step in that direction, adding to last year’s acquisition of Kenyan-based Africa Online. Telkom is also present in the huge Nigerian market, with a 75% stake in Multi-Links, which added nearly 1-million subscribers in the past six months and is expected to become a major revenue generator,” he said.

He however added, “With its results so clearly boosted by Vodacom, the question is how well Telkom will fare once that portion is lost. Since many analysts doubt Telkom’s management skills, market expectations should be relatively easy to beat.”

Neither Telkom nor Vodacom made new announcements this week but their diversification strategies were re-emphasised.

“Far more fascinating are their plans to bulk up as individual rivals, with Telkom entering the mobile market and Vodacom padding out its skills to become more of a technology supplier,” said the Johannesburg-based analyst.

Mthulisi Sibanda