South African incumbent Telkom (JNB:TKG) has separated its wholesale and networks division into a standalone business called Openserve, the company announced. The division will be autonomous and responsible for its own profit and loss account.
Alphonzo Samuels will become managing director of the division, having joined Telkom as chief technology officer in February 2014.
Openserve will enable a more open access environment, promote customer services and boost the ongoing turnaround, Telkom stated.
CEO Sipho Maseko (pictured) said: “Over the past two years, our strategy has delivered positive results, but it is not yet complete. We have tackled inefficiency, complexity and high costs…but to fundamentally change the way we do business, while also working to take up a meaningful and impactful role in an increasingly open-access environment, we have had to review our operating model.”
The company said Openserve aims to “enable more choice, increased innovation and greater service-provider competition [to create] increased broadband access.
Telkom intends to play a substantial role in lowering the barrier to entry for new players and to increase the competitiveness of smaller players.
According to Samuels, Telkom has already begun reducing prices associated with wholesale network infrastructure access.
“With the launch of Openserve, we want to make a significant impact on the way we provide open access broadband to all South Africans. We welcome a more open-access environment and believe that we, as Openserve, can make important headway in helping all South African bridge the digital divide,” said Samuels.
Despite the regulator-friendly language, the company seemed keen to communicate that the separation decision had been made internally. In 2005, BT also made a decision, prompted by the threat of UK regulatory action, to carry out functional separation.
The government’s South Africa Connect plan, announced in 2013, aims to connect 50% of the population to broadband at 5 Mbps by 2016; 90% of the population at 5 Mbps (by 2016) and 50% at 50 Mbps by 2020; and 100% at 10 Mbps and 80% at 100 Mbps by 2030.