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Issue Date: November 2006

What the butler heard

1 November 2006

One of the things journalists are always stumbling upon is gossip and rumours, all of which are denied when you try to get official comment and most of which turn out to be true - to some degree. For example, the journalistically non-biased SABC news has received a directive that states there will be no more reporting on crime - except in exceptional circumstances. That is what one calls a mature approach by government - too incompetent to deal with a problem so we just pretend it is not there. Of course that is just a rumour....
One of the latest rumours in the ICT space, one that has already been published in a daily tabloid, is another bit of Telkom speculation - that may be old news by the time you read this.
The rumour is that everyone's most hated telecommunications provider is trying to expand its reach into Africa by selling its stake in Vodacom and buying MTN. Just like swapping the green socks for the blue ones at your favourite Woolies.
This speculation is derived from the talks Telkom supposedly has held with Vodafone, Vodacom's other shareholder. Word has it Vodafone wants to move into Africa, but wants to drive this from Europe. Nobody I have spoken to thinks this is a great idea, since Europeans in their spiffy suits have a lot to say in Africa but accomplish very little. It seems Vodafone is set on adopting a 'selling mini-skirts to the Taliban' approach in Africa.
If this rumour turns out to be true, it would make sense for Telkom to be looking at an established African player like MTN, a company with a north-bound vision, instead of playing second fiddle to a bunch of Europeans seemingly headed for obscurity in Africa - as someone who never said a thing did not mention. Vodafone would probably end up owning Vodacom and thus a healthy slice of the local cellular market, as well as a few existing African operations.
Of course this is all rumour and speculation at the time of writing, although it does leave some questions hanging. For example, why would a company buy into a local organisation only to neglect its potential in Africa?
On the other hand, it makes sense. Telkom must realise its free lunch (and breakfast and dinner) is nearly over and must look at other under-privileged markets to keep the loot flowing in - and laying cables in Africa at this stage would be stupid. While some may despise the business ethics of Telkom, nobody can say the company is stupid.
So now we wait until something happens to either prove or disprove the rumours. Feel free to send your own rumours and gossip to in the meantime.
Andrew Seldon

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