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Telkom spins out wholesale division
As part of its ongoing strategy to strengthen customer focus through a more flexible and agile operating model, Telkom has spun out its wholesale and networks division as Openserve.
The organisation says the separation heralds a new era in the Telkom Group as it prepares to welcome a more open access environment and all the opportunities it offers. This move is also in line with Telkom’s turnaround strategy to separate its wholesale and retail divisions to facilitate greater focus, accountability and most importantly, customer-centricity.
“Over the past two years, our strategy has delivered positive results, but it is not yet complete,” says Telkom GCEO Sipho Maseko. “We have tackled inefficiency, complexity and high costs and our quest to improve our customer experience remains a primary focus. But to fundamentally change the way we do business, while also working to take up a meaningful and impactful role in an increasingly open-access environment, we have had to review our operating model.”
As part of Telkom’s transformation journey, the company has created distinct business units. Separation is important for Telkom as it facilitates the independence of the Consumer division from the Wholesale and Networks division. Through this separation, Telkom will improve its customer focus and establish clearer lines of accountability. As a stand-alone business unit within Telkom, Openserve will be autonomous and will be responsible for its own profit and loss account.
According to Alphonzo Samuels, the MD for Openserve, the separation signals Telkom’s commitment to a more competitive market and lower prices for consumers. “Telkom has already begun reducing prices associated with wholesale network infrastructure access,” Samuels says. “With the launch of Openserve, we want to make a significant impact on the way we provide open access broadband to all South Africans. We welcome a more open-access environment and believe that we, as Openserve, can make important headway in helping all South African bridge the digital divide.”
As a key driver of socio-economic development, Openserve will enable more choice, increased innovation and greater service-provider competition. The result will be increased broadband access. Telkom intends to play a substantial role in lowering the barrier to entry for new players and to increase the competitiveness of smaller players.
Maseko said that while this would not be easy, Telkom will put in the hard work needed to get there.
“The landscape of telecommunication in our country and around the world has changed and we are responding to this change with this clear and decisive action,” he says.