Merging Broadband Infraco’s network into Telkom will strengthen the incumbent operator’s fixed-line monopoly.
Government’s plan to merge Broadband Infraco with Telkom will reduce competition and be bad for consumers, Rapport reported.
Telecommunications experts and mobile operators have warned that the merger could lead to higher call costs if it is allowed to go ahead.
This comes after a BusinessDay report stating that Infraco and Telkom are likely to merge.
MD of World Wide Worx and industry analyst Arthur Goldstuck told Rapport that such a merger would entrench Telkom’s telecommunications monopoly and tremendously weaken fair competition.
Not only does Telkom own a massive copper network used to supply ADSL and fixed-line telephone services, it also owns and operates South Africa’s largest fibre network.
With over 147,000km of fibre in the ground, Telkom’s fibre network dwarfs anything its competitors has to offer.
A merger with Infraco will add another 14,676km of fibre to Telkom’s already vast network, Rapport said.
It will also force Neotel, which prided itself on being able to offer its services without touching Telkom’s network, to buy wholesale services from the state-owned company.
Neotel has been using the alternative fibre network since before it was entrusted to Infraco.
Cell C and Vodacom told Rapport that if government wants to get rid of Broadband Infraco, it must be sold through a transparent process in which everyone must have the opportunity to bid.
The full report is available in the Rapport of 10 April 2016.
