Telkom (TKG) – Fibre Fight

We assess Telkom’s product offering and strategy in the mobile pre-paid segment. We expect Telkom to be more focused on the pre-paid segment with a view to building scale. Telkom’s innovative and disruptive mobile products continue to impress. We also take a look at the fibre-to-the-home (FTTH) landscape in SA and identify the key infrastructure providers in this market. With Remgro’s Community Investment Venture Holdings (CIVH) acquiring a 34.9% stake in Vumatel and desiring to acquire the remaining share, there is increased urgency for Telkom to increase its FTTH connection rates. We assess the impact that a weakened domestic economy and the migration from legacy to new generation services could have on fixed line data connectivity.