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Biilions can be made by Telkom through LLU: ICASA
2011-06-24
Can local loop unbundling be an amazing opportunity instead of a finance risk for Telkom? The Independent Communications Authority of SA ( ICASA ) lately ( twenty-two June 2011 ) showcased their Local Loop Unbundling ( LLU ) discourse document, beginning the controversy on how SA's copper local loop should be unbundled. While the present view is that LLU will benefit purchasers thru raised competition in the fixed line and ADSL market, Telkom made it obvious this regulatory intervention poses a risk to their business. As the incumbent fixed line operator, Telkom's reaction to LLU is clearly not unique. LLU is usually opposed by normal government-owned monopoly ventures which disagree they're "forced to provide rivals with necessary business inputs" ( WikiPedia ) and that "stifles infrastructure-based competition and technical innovation". Telkom also formerly related that their copper local loop isn't a vital facility as the mobile operators have made wireless local access networks which are much more all-embracing then their fixed line access network. Telkom is predicted to battle LLU or at a minimum suppress any facets of LLU which it feels could hurt its business design but can LLU basically be a blessing in disguise for the operator? LLU and ADSL expansion It is reasoned that slightly under 1/2 Telkom's 4,152,000 fixed lines are literally capable of providing ADSL. According to Telkom's latest results which they have 751,625 ADSL customers, translating into an 18% ADSL fixed line penetration rate. This suggests that there's a heavy chance to convert Telkom's voice-only fixed line customers to ADSL users which won't only bring more cash to Telkom but also stem the continuing decline in fixed line customer numbers. If Telkom can double their ADSL customer base thru other operators boosting customer numbers, they stand to benefit well over R1 bln a year in money. Considering the sub-structure usually exists to make this occur it is going to be a great finance boost for the company. ICASA asserts LLU presents ADSL cash creating opportunity At the LLU discourse document exposing today ( twenty-two June 2011 ) ICASA councillor Thabo Makhakhe asserted that LLU in SA presents a cash generation opportunity which supports job creation and job retention. "We accept that the 'size of the pie' might be increased by R1 bill, that may be generated in new money and shared by the operators each year by just achieving full utilization of the ADSL prepared network," recounted Makhakhe. "This cash might be used not only to keep roles, but to back further network expansions to extend the remit of ADSL capacities of the network," claimed Makhakhe.
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