Telkom lines up mobile phone venture

FIXED-line phone group Telkom's plan to launch a new mobile phone business next year won't boost profit significantly, an analyst said yesterday.

FIXED-line phone group Telkom's plan to launch a new mobile phone business next year won't boost profit significantly, an analyst said yesterday.

Telkom, which sold its stake in Vodacom - its main earnings driver - plans to spend R6billion over five years to launch a mobile phone business to help offset falling profit.

"To be targeting the retail market in that industry, I think it will be suicide for Telkom," Gryphon Asset Management analyst Jan Meintjes said.

Telkom chief executive Reuben September said the biggest fixed-line phone operator in Africa saw opportunities in the mobile data market as competitors dominated the near saturated voice market.

"I fail to see how a converged strategy of fixed and mobile is going to earn significant margins," Meintjes said.

Telkom, which already has nearly 9 000 mobile data services customers, did not disclose full details of the strategy due to "competitive sensitivities". - Reuters

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