Telkom`s enterprise-wide transformation is already bearing fruit for both its residential and business customers, said Sizwe Nxasana, Chief executive Officer at Telkom, at the Merrill Lynch Media and Telecommunications Conference in Johannesburg today.
"Our goal is simple to become an internationally-competitive telecommunications company and remain the supplier of choice once the market opens up," he said.
Nxasana said Telkom continued to make steady progress in meeting this goal, as well as delivering on its stringent licence conditions which included the addition of 2,8 million new lines to its networks and the replacement of one million digital lines before March 2002.
"Common sense will tell you that Telkom requires considerable revenue to achieve its licence targets. Common sense will also tell you that had other competitors been allowed into the market as well during this period, their focus on their bottom lines rather than on transforming a national asset would have resulted in them targeting the most lucrative section of the market, our corporate customers. How then would Telkom be able to generate the funding required to both expand and modernise its telecommunications networks? And where would this have left the millions of South Africans who traditionally have not had access to telephones?
"Much has also been said about how our focus on expanding our networks into previously under-served areas detracts from the company being able to serve the high-tech needs of our corporate customers, many of whom are rising to the challenges of a globalising economy and taking their products into international markets.
"This too is an argument based on anything but sound economic principles. It is a recognised fact that allowing as many people as possible to access a reliable and robust telecommunications networks, in an as affordable manner as possible, is one of the single most effective ways of growing an economy. By allowing a person to grow his wealth basis, you are in turn allowing those large and small to medium sized enterprises to grow their profit margins as well. A larger, easier to reach, more economically-active customer base improves each and every South African businessman`s chances of making his venture both successful and profitable."
Nxasana said that by 2002 Telkom would have invested about R52 billion in capital expenditure, a significant portion of which was already being spent on modernising its networks in a manner that offered considerable benefit to corporate and business customers. Funding would also go towards the completion of the company`s National Network Management Centre in Centurion.
"This will see the centralisation of troubleshooting on the networks, assisting in isolating faults sometimes even before they occur, so as to be able to take the necessary corrective action before these faults impact on our customers.
"One of the largest projects currently underway is the installation of a nation-wide ATM network that will offer corporates leading-edge business solutions. Work has already begun on the implementation of the network core."
Nxasana added that Telkom was currently deploying fibre-optic rings as well as accelerating the upgrading of all its exchanges. This had already resulted in the company being able to launch several enhanced voice and data services.
"We anticipate that all our exchanges will be fully ISDN-enabled before the end of 1999. This will prove of tremendous benefit to business customers, who are under ever-increasingly pressure to move data from place to place faster and more effectively."
Other customer-focused initiatives which had already been introduced included the introduction of a flexible billing system to offer packaged products and services; the evolvement of the company into a total solutions provider offering high-end value added services such as network management systems integration and systems development capabilities; and the formation of a dedicated corporate customer service group within Telkom.
Nxasana said Telkom had not neglected the need to support business initiatives outside its borders in order to attract revenue into the country and into the African continent as a whole.
It was one of the driving forces behind the establishment of the SAT-3/Southern Africa-Western-Africa/South Africa Far East cable system. This will route between Europe and South Asia with confirmed landings in Senegal, Cote d`Ivoire, Ghana, Togo, Benin, Nigeria, Cameroon, Gabon, Angola, Namibia, South Africa, Mauritius, Reunion, India and Malaysia. Additional landings are still being considered. Late last year saw AT&T and British Telecoms join the other operators already involved in this project.
"This project one of many in which Telkom is involved on the continent - will enable many African countries to support the rapid expansion of telecommunications services required by both business and domestic customers. This rapid expansion has already been seen in other parts of the world and we believe that the timing of this project is right to meet the needs of Africa."
Nxasana said he believed that any new fixed line operators entering the market once Telkom`s exclusivity period expired should do so under licence conditions that promoted free and fair competition.
"Ultimately, a free and fair competitive process guarantees that consumers will, in the long term, benefit from the lowest possible prices. Prices in competitive markets are driven down to levels consistent with the cost structure of the most efficient supplier. This process does not tolerate inefficiency. Suppliers unable to sustain profitable operations at prices reflecting the costs of their most efficient rival must become more efficient, offer added value or exit the market. This simple premise should form the basis of future discussions by all interested parties in the deregulation of the telecommunications industry in South Africa."
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