Telkom does not intend to cancel its contracts with current equipment suppliers Ericsson AB, Cisco Systems or Siemens, as they supply the fixed-line operator with various strategic technologies, it says.
The statement comes amid media reports that Telkom will switch from its established equipment suppliers to emerging manufacturers in China, such as Huawei Technologies and ZTE, as early as next year.
A Bloomberg report cites Telkom CEO Papi Molotsane as saying the fixed-line operator is evaluating and testing equipment from Chinese suppliers and that Chinese suppliers will get "a bigger piece of this pie".
Another report refers to Hans Rauman, Ericsson's VP for account management, as being surprised by the news that Telkom is switching east for equipment suppliers, as the companies recently held meetings to reconfirm their partnership.
However, a Telkom employee insists that "no one is being replaced". Rather, forming partnerships with other suppliers is simply a move by Telkom to expand its supplier base. The company would not specify what type of equipment the Chinese suppliers would provide.
Choice and empowerment
Telkom spokesman Lulu Letlape says the company purchases from a vast number of suppliers and, where it makes business sense, will source equipment from more than one supplier for strategic reasons.
The company utilises a transparent multi-disciplined approach to purchasing and supplier management to ensure it receives the best products and services from reliable suppliers, at the best overall price, Letlape says. "The company has established cross-functional sourcing teams, staffed with individuals from different areas of our organisation."
She notes that Telkom has adopted affirmative procurement policies that favour historically-disadvantaged suppliers. "Bid requests are published in our weekly tender bulletin and on the company's Web site."
Telkom seeks to utilise at least two suppliers for all critical equipment, where possible, in order to minimise supply risk, Letlape says.
In the year ended 31 March 2006, the company's top 20 suppliers accounted for approximately 70% of all purchases, she notes.
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