The battle for the hearts and minds of corporate customers by telecommunications operators is not about to spill over into the consumer market, analysts say.
Late last week, Neotel unveiled its first TV advert that is aimed at the corporate market, not at consumers, and at the same time said that it now had half of the country's top 350 companies as its clients. In March, Neotel said it had achieved the R1 billion revenue mark for the past financial year and all of this was from the corporate market.
"Almost every telecommunications operator says that it has a large customer base in the corporate market. This is not surprising as the corporations often buy different services from more than one customer," Rob Forsythe, head of industrial research at Investec Asset Management, says.
Forsythe says the battle ground for the corporate market is going to heat up even more with the entry of the cellular network companies, as they have traditionally been in the consumer space.
"Prices have not started to come down yet, but the corporations are certainly getting more bandwidth and services for the same amount of money," he says.
Lindsey Mc Donald, analyst at research form Frost & Sullivan, says that Telkom is now beginning to see significant competition from Neotel.
"It is time for Neotel to make good on its promises and, if they don't, then there are other players waiting in the wings to do just that," she says.
Forsythe agrees and says it is just a matter of time before the Electronic Communications Network Licences - in effect the telecommunications infrastructure licenses - are issued and will increase competition.
Another analyst, who asked not to be named, says the increased competition will have little effect on Telkom's landline revenue and share price.
"It is a process that has been happening for some time now, more than a year, and the market has got used to it. The problem is that when you have had 100% market share there is only one way to go - down," he said.
None of the analysts expect consumer call prices to come down.
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