Mobile services to replace fixed line in rural areas: source

 ·15 Jun 2012

A well-placed industry source suggests that Telkom may change the role of 8ta from being primarily a pure mobile operator, to a division of Telkom which will focus on data services and provide wireless services in rural areas while Telkom disinvest from all fixed-line services in those areas.

8ta’s shift in focus to data services is no secret. Telkom CFO and Telkom Mobile acting head, Jacques Schindehutte said that it is not a good strategy to try to compete head-on against Vodacom and MTN in the mobile voice market, and that 8ta’s future lies in data.

According to Schindehutte, 8ta is building a robust mobile data network, and is crafting a niche for itself where it can bring a superior offering to its subscribers.

8ta is currently using MTN’s network for roaming in rural areas, and is aggressively rolling out its own network in metropolitan areas. However, it is not clear if 8ta will extend its network roll-out to rural areas.

It is well-known that many of Telkom’s rural exchanges are not profitable. The added scourge of cable theft makes a wireless solution an attractive option to provide telecoms services to rural communities.

Telkom’s mobile services are already used in many areas as a fixed-line replacement technology, and it would therefore not be challenging for the company to extend this strategy to a wider rural area.

Telkom responded to the speculation that 8ta’s role may be changing by saying that it remains “committed to 8ta’s strategy and, although tactics may change from time to time, the broader strategy to grow converged delivery channels to its customers remains a key priority”.

Telkom added that capturing the growing data demand in South Africa is a core feature of the company’s strategy, “and this will be by deploying the appropriate technologies be they fixed or wireless, on an area by area basis, with the view of providing converged services”.

Related articles

8ta MD appointment expected soon

8ta to break even in 2015?

Value more important than price: 8ta

8ta will crash without cash – analyst

Show comments
Subscribe to our daily newsletter