Cover story

It has been 38 years since the millionth telephone was installed in South Africa. During this period, Telkom and its predecessors have had a stranglehold on the local telecommunications environment. Yet today, the company finds itself grasping at a rapidly unravelling security rope, hoping that strategies will work in time to prevent its catapult into obscurity.

Hints of an uncertain future first arose in June 2006. Papi Molotsane, the group's then CEO, reported record profits and revenues, but warned that "Telkom's traditional position was clearly under pressure". In Telkom's annual report, Molotsane warned that the company expected fixed-line revenue to be affected by tariff reductions, increased competition, migration from dial-up to ADSL and the introduction of cost-based interconnection. However, increased volumes were expected to have a partially offsetting effect, he said.