Telkom is seen by many as being in trouble but CEO Serame Taukobong says the fixed-line operator does not need “a saviour” or “knight in shining armour”.
Four different groups have tried to take over or take up a big chunk of Telkom in the past year, but to no avail. This includes a $30bn offer from rival MTN and a consortium led by former Telkom CEO Sipho Maseko that has amassed a war chest of about R12bn for a bid to take up equity in Telkom.
Taukobong says none of the approaches warrants progress or full consideration.
Against this backdrop, Telkom’s boss talks about where he sees the company’s place in the market as an infrastructure player taking advantage of its assets to drive growth and offer new products to customers.
We’re seeing a lot of evolution in how telecom companies operate. How would you characterise Telkom’s business at the moment?
I firmly believe that at our core, we’re an infraco [infrastructure company] business. And if we be ourselves in that regard, you look at the confirmation of what sits in there.
We’ve got fibre. Currently we’ve got towers. There’s the data centres, we’ve also got a very productive mobile business and an enterprise business, as well. Yes, we have identified properties which are noncore and we will be disposing of these quite aggressively. That is what we are seeing in global trends: you start off as an infraco and then you go from there.
A lot has been said about unlocking value at Telkom through fibre and towers. Would Telkom consider a separate listing of the mobile business?
In considering a Telkom mobile stand-alone, I think what is key is: what is the competitive situation around that? And if one had to go through that journey [dealing with] communication issues and all, how would that then translate?
However, I can flip it and say that Telkom Mobile as part of being supported by an infraco then has a better relationship because if you look at the demand on 5G in the future, for instance, it’s going to be on fibre. If you’ve got a strong fibre ecosystem in your own organisation, then you can actually leverage that last mile to get to the point where you want to be.
How is Telkom taking advantage of this ecosystem?
We refer to it as fixed mobile convergence. So, if we have all these entities together we are able to offer a combination of a fibre deal with even mobile SIMs attached to that, meaning we can offer far more from the ecosystem.
What progress has been made in finding investors for the fibre and tower business?
For me, it’s about the fact that we’ve now got these assets. We’ve established them as stand-alone assets. It makes any transaction easier to then create the value on that.
I would have loved to have announced something on the towers but we are in deep conversations and we will be making and announcement certainly in the next couple of weeks in that regard.
We have seen people interested in conversations around Openserve. As I’ve said [previously] we’ll always maintain a majority shareholding in Openserve rather than just selling it, taking the cash and running. It’s about getting the right partners, who are equity investors, [that] can help us grow this proposition, and get to the status of being that infraco that we believe we can be.
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