Tag: Telkom

Telkom fixed-line bloodbath

Source: MyBroadband

Telkom’s interim results for the six months ended 30 September 2020 revealed what most people expected – a big decline in fixed-line subscribers.

The company’s fixed-line subscribers dropped from 1 975 000 in September 2019 to 1 432 000 in September 2020.

This means Telkom lost 543 000 fixed-line subscribers year-on-year, which equates to a 27.5% decline in its fixed-access line customer base.

The latest decline follows a trend which started in 2001 when the company lost 531,000 subscribers from its peak of 5,493,000 fixed-line users in 2000.

Over the past two decades, Telkom launched numerous new fixed-line products, including ADSL, VDSL, and fibre, but this was not enough to stem the losses.

Many Telkom subscribers dumped their fixed-line services and migrated to competitors like Vumatel, Vodacom, MTN, and Rain.

While copper theft was to blame for some of the losses, Telkom was its own worst enemy in many cases.

The company’s poor customer service and billing problems caused tremendous frustration among its users, which prompted them to look for alternatives.

Telkom, however, put the decline down to factors outside of its control like competition from mobile services, copper theft, and tough economic conditions.

The operator has also proactively started to replace its copper-based clients to fixed-LTE – a strategy which is paying dividends.

The decline in fixed-lines can be expected to continue as Telkom is planning to stop providing copper-based services altogether by 2024.

Telkom CEO Sipho Maseko said phasing out copper was needed because maintaining multiple cable network technologies is costly, and expertise on copper networks is dwindling.

Curiously the COVID-19 pandemic has slowed Telkom’s plan to decommission its copper network.

It has created an immediate strong demand for broadband access, and the company’s fibre network is not able to meet this demand.

Telkom’s wholesale arm Openserve is now using its copper network to satisfy this demand in the short term.

The company did, however, say it will continue its decommissioning strategy in locations where copper is not “economically viable”.

Copper used to rule until fibre, LTE, and 5G arrived
For over a decade, Telkom’s ADSL was the only game in town for most South Africans who were looking for affordable, uncapped broadband access.

Sentech’s MyWireless and WBS’s iBurst wireless products provided some competition to Telkom in selected areas in the mid-2000s, but ADSL remained the preferred choice.

Things started to change when Vumatel launched affordable fibre access in Parkhurst in October 2014.

Vumatel showed it was possible to take on and beat Telkom in the fixed-line market, which sparked a fibre revolution in South Africa.

Many other fibre network operators, like Frogfoot, Octotel, Cybersmart, Vodacom, MTN, and SADV, followed Vumatel’s example and started to roll out fibre across the country.

Telkom was on the back foot, and many households and businesses dumped their ADSL line for fibre-to-the-home and fibre-to-the-business.

Improvements in mobile technologies, which made it possible to offer fast and affordable fixed-wireless broadband access, emerged as another big competitor to ADSL.

Over the last few years MTN, Vodacom, Cell C, Telkom, and Rain launched competitively priced fixed-LTE and 5G products.

Telkom even proactively moved many of its ADSL subscribers to its new fixed-LTE products in many areas.

Both fibre and wireless access provide higher speeds at lower prices than ADSL, which means DSL is seen as old and tired technology which should only be used as a last resort.

The effect was a rapid decline in copper lines as ADSL and VDSL subscribers migrated to these new technologies.

 

Unpaid provider turns off Telkom tower

By Jamie McKane for MyBroadband

A MyBroadband reader has switched off the Telkom cellphone tower on his property after the mobile network failed to pay him for the electricity to run the infrastructure.

The property in question is a commercial building in Glenhazel, Johannesburg.

Telkom signed a 10-year lease with the owner to erect a cellphone base station on the building, providing mobile coverage to Telkom customers in the surrounding area.

According to the owner, the agreement stated that Telkom would pay a monthly rental amount for its cellphone tower, as well as reimburse the owner for the electricity required to run the hardware.

However, Telkom has reportedly not paid the correct amounts for the electricity required to run the cellphone tower since the beginning of the COVID-19 national lockdown, the owner told MyBroadband.

This is not the first time this has occurred. The same property owner was previously compelled to switch off the Telkom tower last year after Telkom reportedly failed to pay him for either the property rental or the electricity.

Telkom subsequently began paying him again, although this only lasted for a few months before he began to experience the same issue as before.

Switching off the power
The property owner said he switched off the tower as a last resort, as he had made many attempts to contact Telkom regarding the problem with its electricity payments.

He sent multiple emails to Telkom and attempted to contact representatives about his lease agreement and Telkom’s purported failure to cover his electricity cost as stipulated.

There was no reply from Telkom, however, and no resolution was reached.

The company did state that it would send somebody to inspect the electricity meter and confirm the correct monthly electricity amount to compensate the owner, but this was never realised.

The cellphone tower on the property was, therefore, turned off by the owner on the morning of 5 October 2020, which immediately caused reduced LTE connectivity for Telkom customers in the area.

At the time of writing, the Telkom tower is still turned off, as the mobile network has not paid the property owner the outstanding amount for the arrangement.

The property owner also has a Cell C tower on his property, for which he said he is always compensated on time according to the terms of that lease agreement, and for which he is also compensated for the correct electricity consumption.

Third-party power agreements
Instances of third-party power agreements such as the type described above can cause problems, as experienced by Vumacam last year.

In that case, City Power accused Vumacam of illegal electricity connections, as it was entering into agreements with residents of the areas where its poles were erected to power its hardware.

Regulations may differ for the type of tower rental agreement described above, however, where a base station is located on a commercial property and the electricity compensation is outlined in the lease agreement.

Cell C previously told MyBroadband that the tower it has placed on this person’s property is in compliance with all relevant legislation, as is each of its other towers.

“Cell C negotiates lease agreements with any property owner willing to host a tower,” the operator told MyBroadband.

“There are various ways that Cell C addresses power to a site hosted by a business; including the installation of a submeter or our own City Power connection.”

“In some cases where we are unable to have our own power connection installed, Cell C ensures compliance with City Power processes to connect to the landlord’s power directly,” the operator said.

Telkom did not respond to a request for comment sent by MyBroadband.

 

Telkom loses special BEE status

Altron has won a major court victory against Telkom and its subsidiary BCX in a tiff about the telecommunications company’s controversial black economic empowerment (BEE) status.

Rob Davies, minister of trade and industry in 2019, declared Telkom as a BEE Facilitator.

The BEE legislation makes provision for organs of state to be declared BEE Facilitators, and the effect is that such an organ of state will then be regarded as 100% black-owned, even if it is not.

Altron and other businesses objected to this on the basis that Telkom, and more specifically, BCX, will obtain an uncompetitive edge over private businesses that compete with it if the application succeeds.

In spite of the objections, Davies approved the application and granted Telkom BEE Facilitator status at the beginning of May 2019.

Strangely, although Telkom brought the application, the final decision of the minister reads that the BEE Facilitator status is granted to government, represented by the Office of the Presidency, in respect of government’s 40.5% shareholding in Telkom.

Altron was of the view that the minister’s decision was flawed, both from a procedural and substantive perspective, and it decided to take the minister’s decision on review to the High Court.

MTN joined Altron in the application, with the minister, Telkom and BCX opposing the application.

Chris Potgieter, Altron group executive for legal, following the ruling: “Altron took a decision to take this matter on review because we believe that the minister’s decision to grant the BEE Facilitator status was procedurally and substantively wrong and was contrary to the spirit of the BEE Codes.

“The result of the BEE Facilitator status approval was that Telkom and its BCX subsidiary obtained an unfair advantage over their business competitors through the resultant increase in Telkom’s and especially BCX’s BEE levels, without them having to take the corporate actions and having to incur the costs which other companies have to do in order to improve their BEE status.”

According to Potgieter, MTN joined Altron in the review application and Vodacom was mentioned as it, as a telco, had a vested interest in the matter.

“Altron welcomes the judgment as it shows that government is bound to follow fair and correct procedures and it takes away the unfair competitive advantage that Telkom and BCX obtained,” he says.

Meanwhile, Telkom tells ITWeb: “In compliance with the decision by the Gauteng High Court to set aside the minister of trade and industry’s decision to grant facilitator status to the government in respect of the government shares in Telkom SA, Telkom and certain of its subsidiaries have included the impact of the judgment in their revised B-BBEE certificates.”

Where required, it says, other subsidiaries have applied for re-verification of existing certificates.

“Telkom is pleased that the court’s decision will not be implemented retrospectively. In setting aside the minister’s decision, the court said the ruling will not affect the B-BBEE status of Telkom and its subsidiaries for the purposes of any tender or contract awarded and/or concluded after 7 May 2019 and before the judgment date (8 July 2020).”

According to Telkom, tenders and contracts concluded during this period will retain the facilitator status until the end of the terms of these contracts.

According to a recent MyBroadband article,  Telkom has fallen victim to the group behind the Sodinokibi ransomware, also known as REvil.

The group has claimed responsibility for the attack and has threatened to leak the Telkom client database on its the Dark Web blog.

The REvil / Sodinokibi group is one of several ransomware operators that steals sensitive data from victims and leaks it on the dark web if their targets don’t give in to their extortion demands.

The group has recruited a team of affiliates who carry out attacks on corporate networks.

According to speculation, the group may have tried to extort $1-million out of Telkom.

The company denied that its systems had been infected with ransomware.

Staff working remotely were unable to connect to servers or the Telkom virtual private network.

 

Telkom has announced that it has reduced costs on its retrenchment exercise by R300-million due to the nationwide lockdown.

  • The restructuring process has been reduced from R1.5-billion to almost R1.2-billion
  • According to an ITWeb article, “preserving cash and maintaining a flexible balance has become of utmost importance and urgent during the COVID-19 pandemic as the economy is under strain”
  • In January, Telkom announced 3 000 jobs will be cut
  • In 2019, Telkom said it cut over 2 000 jobs in 2018 and reduced permanent staff by 12.5%
  • Telkom yesterday revealed it will not be able to finalise annual results on time
  • Telkom said it is in agreement with the government on its efforts to fight COVID-19 and also supports government initiatives to curb the spread of the virus.

086 numbers suffer Telkom glitch

By Jay Caboz for Business Insider SA

Network service provider Openserve, the telecommunications infrastructure company that handles the backbone of Telkom’s network, has confirmed a fault currently impacting voice services, especially calls to some call centres.

The most affected are smart customer call centre numbers in the 086 range, which are dropping calls nationwide.

The fault is affecting multiple businesses from emergency rescue service through to call centres at Discovery.

“Voice services have been largely impacted since 07h00 this morning with intermittent call termination failures,” said the company in a statement.

“Openserve confirms that its high-level support personnel are currently engaging with its vendor technical support teams to isolate and resolve a fault that is currently impacting voice services.”

The company has apologised to all those affected and said it had escalated the matter as a high priority.

The most affected appear to be smart call centres lines that make use of 086 numbers, which are dropping calls nationwide.

These are mostly the toll -free numbers, as well as other Telkom landline operations businesses use, reported MyBroadband.

One emergency line has also been affected, that of the Divers Alert Network or DAN South Africa.

“Please note that our call centres are affected by a Telkom network issue in South Africa. We are working to resolve this as soon as possible. Please use +27 82 810 6010 or danmedic@dansa.org to contact the DAN hotline for dive safety advice or an emergency. For the DAN admin office use +27 71 476 1138 or mail@dansa.org”, it states on its website.

The fault mostly affects call centres used by the likes of banks and insurance companies. Some are now providing alternative numbers to use.

  • Telkom – WhatsApp or SMS 081 160 1700, or DM over social media
  • SAhomeLoans – 031 576 5858
  • Discovery Bank – 011 324 4000
  • Discovery Health, Life, Invest and Bank – 011 539 6006
  • OUTsurance – feedback@out.co.za
  • 1Life insurance – 010 493 9007
  • Hollard – 011 351 4669
  • Investec – DM over social media
  • CapeTownCycleTour- info@cycletour.co.za
  • Virgin Active – 021 684 3002
  • African Bank – DM over social media
  • Bidvest- 011 407 3103
  • Standard Bank – Lost & Stolen cards 011 299 4114; Transactional banking 011 299 4701; Home Loans 011 299 4600; Vehicle Asset Finance 011 299 4747

Telkom plans to cut 3 000 jobs

By Sibongile Khumalo for Fin24

Telkom has issued a notice to cut as many as 3 000 jobs – nearly a third of its workforce – across multiple departments, as the company looks to streamline its operations amid falling earnings and changing market conditions.

Trade union Solidarity, which is one of the unions representing workers, said a notice of the process – which would be conducted in two phases – was received on Wednesday.

“We expected the retrenchments to happens but not in such large numbers. This is quite a large number… we did not expect it,” said Linda Senekal, the union’s sector coordinator.

She said affected workers include those employed in the IT department, customer services and small business.

With a 9 000-strong workforce, Telkom is adjusting to a shift in operating conditions, which have seen a significant move from voice to data.

The semi-privatised company, which operates in several countries in Africa, has also faced calls by Independent Communications Authority of South Africa to drop data costs.

Senekal voiced concern that the company had opted to lay off workers instead of opting to upskill employees for tech-driven jobs.

“Telkom employs a lot of contractors to do jobs that should be done by its workforce,” Senekal said.

The company’s interim financial results, released in November, showed that headline earnings dived 36%, while net debt increased by almost R2bn to R11.8bn.

Telkom is among several large organisations considering job cuts as the country battles high unemployment rates and tough economic conditions.

Last year, debt-stricken national airline, SAA, announced plans to reduce head counts, in a move which was fiercely opposed by unions.

This week, MassMart, which owns Game, DionWired and Makro, among others, announced on Monday that it was consulting with its employees about the potential closure of 34 stores. The move could affect up to 1 440 employees.

Telkom’s recently released results show that fixed-line broadband subscribers – which include ADSL, VDSL, and fibre-to-the-home customers – declined from 974 181 in September 2018 to 781 255 in September 2019.

This means Telkom lost 192 926 fixed broadband subscribers over the last year, which equates to a 19.8% decline in its customer base.

However, the struggling telco has offered to buy Cell C and combine South Africa’s two smallest mobile network operators to better compete against larger rivals.

The bid includes a plan to reduce Cell C’s debt and renegotiate contracts with suppliers, the people said, asking not to be identified because negotiations are ongoing. Telkom wants to take over the management of Cell C’s business.

The approach comes as Cell C explores options with MTN and local investors known as the Buffett Consortium to recapitalise the company, which may include the sale of some of its assets. The two offers will be considered side-by-side as Cell C and its owners try to restructure R9-billion of debt.

This comes after Telkom recently announced that it will become the first national telecommunications operator in South Africa to switch off its legacy 2G network.

The company will terminate 2G services in March 2020, according to CEO Sipho Maseko.

The company has about 250 000 2G-only users left on its network, out of a total subscriber base of 11..5-million, as most have migrated from 2G to 3G.

Landlord turns off Telkom’s cellphone tower

According to a recent article by MyBroadband, a frustrated property owner switched off a Telkom cellphone tower after the mobile network failed to pay him for electricity and rental.

  • The tower sits on a commercial property in Glenhazel, Johannesburg
  • Telkom and the owner reached an agreement to mount a base station on the building, allowing it to provide improved coverage in the area
  • Telkom was to reimburse the owner for the cost of the electricity required to run the site
  • Telkom also agreed to pay a monthly rental amount
  • Initially bills were paid on time, but then payments became sporadic
  • Telkom paid less than the agreed upon amount, or not at all
  • Calls and e-mails to Telkom went unanswered
  • The landlord warned Telkom that if he did not receive payment by a certain date, he would switch the tower off
  • He received no reply and switched the tower off
  • This has resulted in reduced coverage for local residents who are Telkom mobile or fixed-LTE customers

How WhatsApp is killing calls in SA

A recent article by MyBroadband explored how the popularity of VoIP services like WhatsApp has impacted voice income for South African major mobile networks: Vodacom, MTN, Telkom and Cell C.

  • Vodacom has experienced a “slight decrease in the consumption of traditional voice minutes”, but said the advantages of traditional GSM calls still make it a good option for consumers.
  • MTN told MyBroadband that it has “experienced a decrease in traditional calls and an increase in VoIP usage to match”.
  • Cell C admitted they had noticed a decrease in the amount of traditional call minutes being used, but said that it had stabilised.
  • Telkom told MyBroadband that it had “not seen a decrease in the average minutes of use per user for both on and off-network calling”.

However, according to We are Social, “WhatsApp is the biggest messaging app … in South Africa. We have 38-million unique mobile users, which grew by two million between 2017 and 2018. ”

The high costs of data in South Africa prevent many users from using WhatsApp’s full capabilities.

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