Telkom – Infraco Merger Could Have Negative Effects

The Telkom and Broadband Infraco merger has caused somewhat of a stir in the telecoms arena.

We reported last week regarding the Government’s plan to merge Telkom and Broadband Infraco as a part of their restructuring of state entities to remove duplication.

This week, we follow that on with an interview held with with the MD of World Wide Worx, Arthur Goldstruck by Rapport, as reported by MyBroadband, South Africa’s leading tech news site. According to Goldstruck, the fact that Telkom already has a national fibre footprint of 147, 000km and with the merger will now acquire an additional 14, 676km could anchor Telkom’s telecommunications monopoly and tremendously weaken fair competition.

According to the report, this will impact providers such as Neotel who have prided themselves in running a network completely separate from Telkom’s using the alternative fibre-network since before it was entrusted to Infraco. Vodacom and Cell C have also voice their opinions on the merger stating that if the state-owned Broadband Infraco is to be sold, that it should be sold through a transparent process that gives everyone a fair opportunity to bid on it.

The merger also stands to affect more than the other telco’s, impacting consumers as well with the likelihood of increased call charges if the merger is to go ahead.