I don’t have fibre. My neighbourhood is an oasis of low-speed Internet tranquillity surrounded by lit-up fibre areas.
Currently, I rely on a very stable 10Mbps line from Telkom, one I’ve had at this specific location for many years. But its time is definitely up, since Telkom is abandoning its copper network. Yet, despite fibre lines so close I could throw a proverbial rock at them, there is no sign of getting the service any time soon.
Those of us who still use ADSL received two pieces of bad news over the past few months. The first was Telkom formally declaring it is done with its copper network. Then more recently, Telkom’s results revealed it really has no interest or momentum as far as FTTH is concerned.
Some colourful phrases are being used to describe Telkom’s loss of 189 000 fixed-lines – even though that is a slowdown from 2018’s 274 000. A lot more interesting is that Telkom only added 55 000 fibre lines.
What makes Telkom’s fixed-line collapse so shocking is that it should be winning at fibre – and back in 2017, it thought it would be, as columnist Hilton Tarrant pointed out. It has several advantages. For example, why isn’t Telkom or Openserve, its infrastructure sister company, using telephone poles to run fibre lines to homes? Why isn’t it able to upsell to what are still several hundred-thousand fixed-line customers representing over R3 billion in revenue?
Maybe the top floor is just so in love with Telkom Mobile that they are ignoring issues worth R3.2 billion in the rest of the organisation.
I have a theory on this. Twenty years ago, Telkom was one of the most loathed companies in this country. Its monopoly over data prices and Internet access made it incredibly expensive and limiting to go online. That monopoly persists – Telkom never relinquished access to its copper network, so-called local-loop unbundling. That was once seen as the thing that would emancipate South African Internet. But Telkom has been successfully stonewalling that for a long time. Maybe this is why Telkom Mobile first started as 8ta – the Telkom brand was too toxic.
The Telkom monopoly broke in three places. More submarine cables and mobile broadband made it possible to undermine its control. Fibre then showed up and so began a slow exodus of its broadband customers.
Yet at the same time, a small miracle happened. Telkom got into mobile, first disastrously as 8ta and then more boldly as Telkom Mobile. Maybe the all-or-nothing competitive zeal made things run differently, but Telkom Mobile gained ground by going after the incumbents’ weak spots, aiming for poorer people and with a heavily urban focus. Maybe it was out of necessity, but it worked.
The new results make it clear: there are two Telkoms. The new Telkom is the one buzzing on mobile and no doubt behind the strategy to replace fixed-lines with LTE (btw, LTE is not on the same level as a stable 10Mbps ADSL line, at least none I’ve tried.) The old Telkom, though, still languishes somewhere in the back and appears to be in charge of the FTTH strategy.
I like the new Telkom. It has made a tangible difference in the highly unbalanced mobile market and has the drive to go even further. This is why, at face value, Telkom buying Cell C sounds like a smart call. If anyone can push those assets in this market, it’s Telkom.
But perhaps it’s also creating a type of tunnel vision. Maybe the top floor is just so in love with Telkom Mobile that they are ignoring issues worth R3.2 billion in the rest of the organisation. Maybe they are relegating all the old guard to the fibre division, where they can be ignored while everyone laughs about mobile.
Is Telkom’s fixed-line business and, consequently, FTTH being sacrificed as Telkom tries to ignore that it was, not long ago, still pretty toxic? Telkom’s broadband monopoly didn’t fully start to crumble until Afrihost used a wholesale tactic to drastically undercut prices. That was around 2009, only a decade ago.
I guess the toxic Telkom is still in there and it is dragging Telkom’s potential in the FTTH market down with it. This is bad news for the FTTH market, which dropped from over 200% growth in 2017 to only 66% growth in 2018, according to data from the FTTX Council Africa.
I recently ran into Telkom reps at my nearby supermarket. They were shilling Telkom fibre and very happy when I took an interest. It was, unfortunately, the same setup I’ve seen all over Johannesburg: a flimsy branded gazebo on a lonely pavement spot with an unfolded table and two people hopelessly trying to get the attention of pedestrians. They were so happy I was interested but didn’t know that where I live – a block away from their canvassing – there is no fibre.
Something fibre companies could try is go door-to-door. That’s what the criminals do. They pose as fibre reps and get people’s personal details on their application forms. People are that eager for fibre and con artists are exploiting it. I know this because one of them arrived at my gate, but fortunately, their pitch didn’t add up.
Still, that’s more initiative than a gazebo on a pavement.
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