Convergence before liberalisation a bad idea

By Damaria Senne for Telkom
Satnac, Drakensberg, 12 Sep 2005

The introduction of convergence legislation must defer to government`s policy of managed liberalisation of the telecommunications market, says new Telkom CEO Papi Molotsane.

Molotsane argues that where convergence was imposed before effective liberalisation, market failure was the outcome. He was speaking at the Southern African Telecommunications Networks and Applications Conference (Satnac) at the Champagne Sports Resort in the Drakensberg.

Ready for competition

In a later interview with ITWeb, Molotsane also spoke about Telkom`s readiness to work in a more competitive environment. One of the key issues is repositioning Telkom from a telecoms company to a communications company that is driven by customer needs, he said.

The proactive change is influenced by the changing marketplace, as well as input from technical experts within the company, Molotsane said.

"The industry is changing and you will die if you do not become proactive," he said. Telkom is looking at what it can do strategically to make it more relevant, he continued.

Telkom COO Reuben September also spoke about the need to shift from providing fixed and mobile services to looking at content provisioning as another aspect of the business.

As the market changes, the business models evolve, said September. As a result, Telkom is considering content management and distribution, which would in turn lead to the reconstruction of the company`s relationships, he said. As an example, September cites a relationship that has been formulated with Intel, which will contribute to Telkom`s plans to go from a fixed-line operator to mobile.

"Competition will not only benefit users, who will have more choice, but will also benefit service providers." The consumer will have the opportunity to evaluate the company`s services in comparison with another provider, said September.

Another service provider will also help with awareness, bringing more voices and more funds to the marketing of products and services, said September, adding: This will increase production and economies of scale will improve.