Telkom, or how a good idea goes bad.

Posted by sgb
I love driving Alfas - but when something goes wrong . . .
User is currently offline
on Tuesday, 06 December 2011
in Digital Blogs

Some people always seem to get it wrong, even when they have the best intentions in the world.

Let us take Telkom as an example. They have had a bad press with everyone large and small against them.

The launch of 8-ta has not been a roaring success. In its first year of operation whey went through almost 1billion rand in operational costs, and that is extra to the capital cost 1.6b rand for building base stations. It is not expected to break even operationally on a yearly basis (EBITDA) before 2014. Even that is hopeful, as 8-ta’s ARPU (average return per user per month) is R15.86 as compared to MTN at R101 and even Vodacom at R85 (figures summarised from The Citizen on-line)

Telkom has also been involved at loggerheads with Neotel and ICASA recently over the unbundling of the local loop – the final mile of copper between the exchange and your household. At present Telkom has a monopoly which keeps pricing high, but Neotel (and others) are anxiously waiting for the regulations to be relaxed. ICASA has extended Telkom’s monopoly for another 4 years.(Report from Business Day) ).

Telkom has also recently been involved in appeals to the competitions board over anti-competitive behaviour in the marketing of VANs, where customers were not allowed to create and lease out their own virtual networks (Report in IOL).  It also recently sold Multi-links in Nigeria for about $10million, after originally paying over $410 million for it (Report in fin24).

These problems are all reflected in the share price. At the height of the market in May 2008 the Telkom share price on the JSE (TKG) was 8800, and is now 3000, a loss of 66%. This compares to the All Share index going from 33000 to 32500 (loss of 1.5%) or even MTN which reflects a loss of 9.3% in dropping from 16000 to 14500.

So how does this affect me, and what is the relevance to the good intentions?

Well, I have a Telkom ADSL line. Although called ‘fast’ it is not:- it is actually the slowest of the three options, being ‘fast’, ‘faster’, and ‘fastest’, but that is another story. Thre has been a lot of negative press recently about Telkom ADSL, how it keeps dropping and how Telkom seems unwilling or unable to resolve their problems. So when my service provider finally came up with the offer to take over the ADSL lines and manage it on your behalf I jumped at the deal.

I must emphasis at this stage that I had never had a problem with my Telkom supplied ADSL line. I just never wanted to, as the stories I heard were that Telkom’s call centre was second only in user frustration level to Vodacom.

So I changed:- asked for a 384kbps line to be transferred. Suddenly my bill went up. On querying I was told that Telkom had given me a 4Mbps line and that was what was transferred. They therefore billed me for a 4Mbps line. I complained – I could only afford the 384kbps line. Eventually I was told they would downgrade it – but it takes 10 days.

Now I am an unhappy customer, unhappy with both these parties. If Telkom had told me about my line  – maybe it was just been tested, maybe they had surplus – I would never had changed. I had never had a problem after all. And if my new party had just kept quiet, downgraded the line and charged me correctly, I would have been happy with them.

The moral of the story? If Telkom could only learn the power of the media (it is a media company after all). Everything is considered to be bad, so people are leaving – even without cause, as in my case. Give us some good stories. Tell us when it is going well. Help us to value your service.


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I love driving Alfas - but when something goes wrong . . .


I love driving Alfas - but when something goes wrong . . .
User is currently offline
sgb Sunday, 11 December 2011

An addition: my mother asked for her phone to be moved (transferred) to a new address as she is moving. She was told they cannot give a date - they have to wait until there are a few requirements for service in that area.
So if you move you may be without a phone, for weeks or even months, with no indication of when the phone will be transferred??

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