South Africa: Telkom’s clever use of its mobile networks demonstrates how the once sluggish monopoly has evolved into a nimble underdog
16 August 2019
After innumerable outages caused by stolen copper cables, my mother was about to cancel her Telkom line when a box arrived at her door. In it was a new phone that looked like a larger corporate desk phone, which could also act as a WiFi hotspot. Instead of cables to connect it to the Telkom port on the wall, it had a SIM card and a battery, much like a cellphone. It is, in fact, a cellphone, but one masquerading as a normal landline.
Telkom, which has battled copper cable theft for decades, has started transitioning its landline users to it mobile network. Instead of my 91-year-old mother’s phone using wires to connect to the network, it now uses Telkom’s mobile network. It’s been a game changer.
Instead of days or weeks without a line, it now works continuously.
Last week Telkom confirmed that it is migrating its landline users off the old copper network that defined fixed-line businesses. It is starting with prepaid customers and will ultimately, I’m sure, kill of all its wired businesses, including ADSL, the internet over copper service that defined broadband internet access in its early days.
It’s a no-brainer. Rather than spends tens of millions, and sometimes hundreds of millions, each year in replacing copper, Telkom is opting to leave this now redundant technology behind.
It’s possible because of two major developments. The first is the exponential growth in mobile, both the networks and the usage. These have effectively replaced communications for just about anyone, except office-bound workers who make lots of calls. In many instances, those phones no longer use traditional voice relays but already use voice over Internet Protocol (VoIP), which is essentially just another way to transmit data (which is what a voice call is now).
The second is the rapid growth of fibre to the home (FTTH) as the new alternative for internet access. The only reason to have a wired connection into your home or business is for fibre, because of how fast and relatively cheap it is. Fibre is the delivery mechanism for the 21st century, offering significantly faster speeds than copper – as much as 1 gigabit per second (Gbps) instead of megabits per second (Mbps) – at much more reasonable costs. I have an uncapped 100Mbps fibre line through Fibrehoods (bought by Vumatel) and Vox for R1,200 a month). It’s roughly what I was paying for a 10Mbps ADSL line a few years ago, but considerably faster .
The new fifth-generation (5G) networks demonstrated by Huawei offer these fibre-like speeds without digging up any roads.
Telkom has made some pretty good business calls in the last few years, as it has evolved from a sluggish and arrogant monopoly to a nimble underdog in the mobile space – where it is the fourth player after Vodacom, MTN and Cell C.
Its Free Me data packages are very competitively priced for large amounts of broadband, and now it’s cleverly porting from the unsustainable copper cable network towards mobile. Once 5G speeds are available, it’ll be an even better business decision.