Telkom is not resting on its laurels while new technologies erode its traditional markets, but is actively involved in expanding its range of operations.
Enjoying a high profile is the company's planned acquisition of Business Connexion (BCX) for R2,4-billion, currently under the jurisdication of the Competition Commission. Should the deal go through, Telkom expects BCX to create shareholder value by opening up the data hosting and desktop management market.
Last year, Telkom also announced the creation of Telkom Media, which has applied to ICASA for a commercial satellite and cable subscription broadcast license.
Telkom Media’s vision is to be Africa’s “digital media provider of choice” and is developing a set of new digital media services to address the diverse needs of both the consumer and business markets.
Telkom Media is seeking to develop a digital service portfolio across three core service areas:
* Content and service over the Internet (online content services and ISP services);
* Content and services over satellite (Satellite TV and radio); and
* Content and services over a “quality of service” network (IPTV including broadcast and on-demand TV and interactive services).
Telkom Media has funding of more than R7,5-billion over eight years. Its basic bouquet of channels is estimated to cost no more than R100.00 per month.
Evolving into a Pan-African service provider is also one of the company’s growth initiatives, with the aggressive expansion of Africa Online and Multi-Links being key considerations in this context.
Africa Online, acquired for R150-million during February 2007, is an Internet service [rovider with operations in Kenya, Tanzania, Cote d’Ivoire, Ghana, Uganda, Namibia, Swaziland and Zimbabwe. The investment approach focuses on brand development, creation and development of customer channels, improvement of network systems, human resources development and an expansion drive targeting other African countries.
The expansion in Africa will be through a service provider strategy that is aligned with Telkom’s domestic fixed/mobile service provider strategy.
MultiLinks, a private telecommunications operator in Nigeria with a Unified Access License allowing fixed, mobile, fixed-wireless, international and data service, was acquired in April 2007 for R1,985-billion. Via the acquisition of Multi-Links, Telkom has established a key regional footprint on the West Coast of Africa.
Increasing capacity and network speed are also pivotal to growth initiatives. Increased demand and bandwidth hungry applications have required Telkom to upgrade its capacity. Telkom spent R6,599-billion during the year on its capital expenditure programme in line with its five-year R30-billion capital expenditure programme.
It is estimated that Telkom will spend approximately R7-billion on capital expenditure in the financial year ended 31 March 2008.