Telkom will spend as much as R6bn in the next five years constructing its own mobile telecommunications network.

“We are negotiating innovative financing structures with our suppliers in order to potentially reduce our capital investment in favour of operating lease-type payments which include technology renewal,” Telkom says in notes accompanying its financial results for the six months to 30 September 2009.

“In addition, we are in the process of negotiating arrangements regarding co-location and sharing which may reduce our capital investment and enhance our speed to market. We are employing the latest technology combining both 2G and 3G composite technologies which significantly reduce interoperability costs.”

Telkom says it is at an “inflection point with growth in traditional fixed-line voice revenues declining”.

“The majority of global fixed-line incumbents have discovered that a successful operation requires an integrated mobile business. We believe that there is a market opportunity in SA as mobile voice and especially mobile data are still experiencing growth.

“Telkom has a competitive advantage by virtue of its existing asset and customer base. The mobile business could also assist Telkom in addressing fixed-line cost challenges and will position Telkom more competitively in the market.

“A product range spanning both mobile and fixed value pools will help Telkom defend itself more effectively against competitors.”

The company says the mobile business plan has been approved but information regarding its network build and go to market strategy cannot be disclosed “due to competitive sensitivities”.

Telkom already has nearly 9 000 mobile 3G subscribers in areas hard hit by copper theft. — Staff reporter, TechCentral