Telkom acquires 75% of Nigeria’s Multi-Links

Telkom is gaining momentum in its plans to march across Africa with a $280m deal to gain control of Multi-Links Telecommunications in Nigeria.

This raises two questions: 1) Why is Telkom spending all of this money expanding internationally instead of investing in providing a superior, lower cost service in South Africa, and 2) How will Telkom manage in an environment where it actually has real competition?

Neotel gears up for corporate launch

Only five years behind schedule, South Africa's official second fixed-line telecommunications provider Neotel will be launching phone and internet services for business customers from mid-March. Apparently Tata-managed company has already acquired more than a dozen large corporate customers.

They are currently putting together a cable/fibre network and a Wimax/CDMA infrastructure that has the ability to bypass Telkom's stranglehold on home phone lines. Neotel are promising to undercut Telkom's prices (how hard can it be to undercut the highest prices on the planet?) and to beat them on service (again, how hard can this be?).

IOL Technology Article

Telkom Takes Over Internet Service Provider Africa Online

What do you do when you already own the telecommunications market in your home country? You expand internationally. Telkom has apparently acquired Africa Online, an ISP that operates in ten African countries, including South Africa's neighbours Namibia, Swaziland and Zimbabwe. Telkom will pay R70 million to African Lakes, the UK-based company behind Africa Online.

The penetration of the internet is of course very low outside of South Africa, and there is actually real competition to deal with, so Telkom may find its management competence a little stretched. In South Africa, Telkom's battles with its "competitors" could be likened to a club rugby team who only ever plays against school under-14 teams -- and gets to change the rules depending on the run of play. But out in the real world, there are All Blacks and Lions and more or less level playing fields. With luck, the experience will enlighten senior management at Telkom, and teach them something about customer service.

Perhaps they might even pick up on the economics of abundance -- imagine the impact on Telkom revenues of providing really low-cost web access in South Africa. Imagine the impact on the economy and education...

Business Day article