Thoughts on 8.ta

Telkom's recently launched mobile phone service (and South Africa's 4th) - 8.ta, has not exactly created the market buzz one might expect. In some respects, their offering does have some real value - specifically in the call charges; but my personal opinion is that Telkom has missed the boat (or perhaps are still waiting to really launch their boat). And that is, Telkom is the only South African telecommunications provider that can provide real fixed-mobile convergence services; something that could really make them different to other telcos in the market.

South Africa's lack of a viable competitor to Telkom can be blamed on many things; including foot dragging by the regulators and/or the Department of Communications (which incidentally has a conflict of interest, being the majority shareholder in Telkom). But since last year, there are over 600 licensed operations in South Africa - with more than 10 operators providing various levels of fibre based services to business in South Africa. Yet, none of them - including the established mobile operators in Vodacom and MTN as well as Neotel have really taken the leap into providing large scale residential and SME fixed line services. Furthermore, considering the large number of security estates and business parks in South Africa; this is strange given the relative high density in potential subscribers for fixed line services.

And enter Telkom in the mobile market. The one trick that Telkom can really play is a fully converged telecommunication offering. Take data service - Telkom can potentially merge their capped ADSL, 3G roaming and WiFi hotspot offering to one seamless data service offering; that provides a single data offering regardless of what medium is used. Yes, Vodacom has something similar - but Telkom would be the only service provider that can provide the seamless service since they also own effectively all the access paths. Likewise, a fully converged voice service could allow seamless transition between mobile and fixed telephony; something similar to what corporate telephony offerings from unified communications vendors such as Cisco. And the one interesting impact of such a service could potentially be no difference in call charges on "on-net" calls; as long as the calls are to Telkom.

Convergence strategies would also require Telkom to relook at its current fixed line offerings - something it has so far shown no interest in really pursuing. Furthermore, by setting up 8.ta as a separate service with minimal Telkom branding; it is questionable how much converged services it is really considering offering.