WHEN Neotel launched its first consumer telecoms services last May it expected to collect 60000 subscribers within nine months, but customers proved slow to abandon former monopoly .
Neotel technology chief Angus Hay admits that the 50000 mark remains elusive. But April will bring a fresh confidence boost for those tired of Telkom’s stranglehold on the fixed-line market with the introduction of individual number porting.
Individuals and small businesses wishing to switch operators will be able to do so without losing their existing numbers.
Neotel is predicting a surge in new customers who had blanched at the thought of having to change numbers. Analysts seem more cautious. The introduction of cellular number portability in November 2006 had a far smaller effect than predicted.
Still, there’s no question that the change will bolster Neotel’s challenge to Telkom, forcing Telkom to strengthen its offerings or lose customers when its core landline business is in decline. SA’s telecoms prices, exorbitant by international standards, should start coming down.
Yet this is just one piece in the puzzle of a fully liberalised communications market. The big one will be local loop unbundling, ending Telkom’s hold on the “last mile” connections to individual homes and businesses.
In 2007, Telkom was given until November next year to complete the unbundling, but with regulator Icasa still to publish draft regulations SA might have to wait a little longer for real competition in the fixed-line market.
JUNIOR miner Resources updated the market on its first-half results yesterday, predicting a 45%-50% increase in earnings per share if calculated in pounds (required because the company’s primary listing is on the alternative market in London AIM).
This is the good news. The bad news is that in rands this impressive number falls to a more modest 17%-22%. Even worse, headline earnings will be down 13%-18% in the currency of the country where it primarily operates.
The difference demonstrates the effect currency movements can have on corporate results — something we, of course, know all about. However, in Pan African’s case the interim results are a bit beside the point, because the company is still trading under a cautionary notice, which could throw the numbers out further.
Yet the underlying story remains good: the company is now listed on the main board, and gold is holding its high value, mitigating the effect of the muscular rand. Also, it has no debt, it’s unhedged and can fund expansion from existing cash flows. How many majors can say that?
ONE interesting survey has emerged already from the capitalist’s ball at Davos though it’s hardly good news for the gathered captains of industry. A World Economic Forum poll has found two-thirds of people around the world think the global economic crisis is also a crisis of ethical values calling for more honesty, transparency and respect for others.
The poll also suggests strong support for the “triple-bottom line” notion, with only 12,9% of the respondents of the 130000 people polled agreeing with that businesses are primarily accountable to shareholders; just more than 18% said clients and customers; while 22,9% said the primary focus should be employees.
But nearly a majority, 46%, said all of them equally, which is essentially the core proposition of the “triple-bottom line” notion.
The poll shows the extent to which the global economic crisis has hurt the image of capitalists and also produced a growing “trust gap”.
Interestingly, the response to the poll question (“the current crisis is also a crisis of ethics and values?”) was amazingly uniform around the world, with the proportion of yes votes in Mexico (80,1%) not far off those in SA (77,4%) or 70,7% in the US.
Global free-market capitalism clearly has an image problem.
n Dave Marrs edits The Bottom Line. E-mail to: marrsd@bdfm.co.za