ISPA welcomes Openserve’s split from Telkom

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 19 Sept 2022
Serame Taukobong, Telkom Group CEO.
Serame Taukobong, Telkom Group CEO.

Internet service providers (ISPs) have welcomed Telkom’s move to separate its Openserve unit from the group.

In August, Telkom announced it had approved the legal and structural separation of Openserve, effective 1 September.

At the time, Telkom Group CEO Serame Taukobong said: “We have been on a journey to transform and unlock value in the group by separating the operating businesses to become standalone entities, which started with BCX and subsequently Gyro, which now operate as separate legal entities wholly-owned by Telkom.

“Openserve follows suit as a wholly-owned subsidiary of the Telkom Group, which will promote and drive autonomous ability and market visibility.”

Openserve CEO Althon Beukes said the decision was part of the next phase of Openserve’s journey to unlock greater value and “positioning Openserve to respond to the ever-changing regulatory and competitive environment and enabling us to continue to focus on our growth ambitions”.

Openserve is South Africa’s leading wholesale infrastructure connectivity provider, with the largest open-access network across the country.

In its latest financial results, Telkom said Openserve grew its homes passed base by 45.3% year-on-year to more than 890 000 and increased the number of homes connected with fibre by 35.2% year-on-year – a connectivity rate of 46.6%.

In a statement, industry body Internet Service Providers’ Association (ISPA) says it welcomes “Telkom’s pro-competitive and long-awaited separation of its Openserve wholesale infrastructure division from the remainder of the Telkom Group”.

According to ISPA, the Competition Commission, in response to an ISPA complaint in 2002, ordered the initial “functional” separation of Openserve from the remainder of the Telkom Group in 2012.

“Ten to 20 years to achieve significant change is not a long time in the South African scheme of things and we congratulate Telkom Group on this milestone,” says André van der Walt, ISPA chairperson.

The industry body notes that last year, in June, ISPA welcomed Openserve as a member of the non-profit industry body that spent much of its early years focused on preventing Telkom using its monopoly position to unfairly compete against the country’s fledgling internet access providers.

ISPA’s steadfast efforts to shape and influence ICT policy in SA for the better eventually resulted in Competition Commission rulings that have now resulted in the split of Telkom’s wholesale and retail activities, says ISPA.

It adds this finally levels the telecoms playing field to the advantage of consumers, ISPA members and the economy.

“As the initiator of this process, ISPA would like to be the first to applaud: the consumer is finally the winner as Telkom achieves structural separation in 2022,” says Van der Walt.