Telkom is looking to restart talks with AT&T Inc about its Africa partnership, which has so far brought little new business, the acting chief executive of South Africa's largest fixed-line operator said on Tuesday.
Jeffrey Hedberg also told Reuters on the sidelines of the company's annual shareholder meeting that Telkom was not looking for new acquisitions now.
Telkom agreed in April 2009 to work with AT&T to provide IT and telecom services in Africa in a bid to win business from foreign firms expanding on the continent, but so far the partnership has failed to win many contracts.
"The partnership (with AT&T) has not progressed to an extent we would like to date," Hedberg said, adding the problems stemmed from issues related to pricing and after-sales support.
"I am going to re-ignite discussions with AT&T," he said.
Telkom in April 2009 signed a memorandum of understaning with AT&T that would allow the US firm's clients in Africa to use Telkom's Internet-based network on the continent.
Telkom's network - built by acquiring companies such as Kenya's Africa Online and MWeb Africa - was to be linked to AT&T's global network, helping it win business from AT&T's customers.
The company is now focusing on existing customers, not acquisitions or chasing new licences, he said.
"We now know what we want to do with our South African customers...they need to be serviced in Nigeria, Nairobi. That's where much stronger focus is going to be now, rather than buying a third mobile licence in Cameroon or a fourth licence in Zimbabwe," he said.
Telkom has announced an ambitious R6-billion plan to enter South Africa's competitive mobile phone market, a move analysts have said would be very difficult.
"We are working very hard and remain committed to launch our mobile before year-end," he said.
Showing posts with label news. Show all posts
Showing posts with label news. Show all posts
Tuesday, August 24, 2010
South Africas Economic Growth Slows To 3,2% In Q2
The 3,2% gross domestic product (GDP) growth figure for the quarter ended June, released by Statistics South Africa (Stats SA) on Tuesday, was lower than expected, particularly given that a significant part of the FIFA World Cup took place on South African soil during the period.
Investment solutions chief economist Chris Hart told Engineering News Online that 3,2% was "disappointing" as economic growth of around 3,6% was anticipated for the second quarter.
"A sturdy boost in the economy was expected over the World Cup period, but one should also account for the ‘holiday effect' that was created by the event, which would imply stronger growth in the services sectors and weaker growth in the country's production sectors."
He pointed out that the disheartening figure placed South Africa slightly above growth seen from developed countries, but below the strong growth experienced in emerging economies.
"One would have expected a stronger recovery by this stage, which may suggest that the authorities might be tempted to put in place additional measures for growth," Hart said.
Investec economist Kgotso Radira agreed, pointing out that the GDP outcome was weak despite the R93-billion that the National Treasury estimated was injected into the economy as a result of the World Cup. "Excluding this, GDP growth would have been much weaker than the 3,2%, showing that conditions remain challenging."
Radira said that given the weak growth in spite of favourable inflation outlook and the rand strength, Investec believed that an interest rate cut of 50 basis points was likely in September.
Nevertheless, speaking at the release of the GDP statistics in Pretoria, Stats SA director-general Dr Rashad Cassim said that sectors related to the World Cup event did show stronger growth rates. "This is evidence of some growth generated by the event, and we will see more of it in the next quarter, because the World Cup was spread over two quarters."
Even though quarter-on-quarter growth dropped from 4,6% in the first three months of the year, year-on-year growth climbed from a negative growth of -2,7% last year, to the 3,2% growth experienced this year.
Cassim told Engineering News Online that the main drivers behind the increase in economic activity during the quarter was the wholesale, retail, motor trade and accommodation industry that all climbed by 0,7 percentage points from the previous quarter.
Further, activity within the manufacturing industry rose by 1,1 percentage points, while government services were up with 0,5 percentage points.
In contrast, the mining and quarrying industry fell by -1,1 percentage points, owing to safety-related stoppages, stockpiling, labour issues and regulatory uncertainties.
Cassim said that if the third and the fourth quarter growth for the year was exactly equal to the first and second quarter of the year, South Africa was looking at a GDP growth of 2,3% for 2010.
Investec expected growth to remain below trend until 2012 as consumers remained overburdened by debt and rising job losses, and even then economists predicted growth rates of around 4%.
South Africa's Finance Minister Pravin Gordhan has recently called for a new sustainable growth path of 7% GDP growth for a period of 20 years, to alleviate unemployment rates, income inequality and serious health, education and infrastructural deficits in the country.
Hart emphasised that if the country was to even come close to such growth rates, it needed to "radically overhaul" its tax structures, industrial and regulatory structures, and seriously relook its labour legislation.
"Investors do not want to be faced with hostile unions and regulations.
"Growth is something you have to buy, which means that a country would need savings and a favourable investment climate to build additional economic capacity. A country could also resort to debt or cash float to acquire the capacity, but these methods are not sustainable over a longer period of time. This means that the burden side of our taxes need to be on the consumption side of the economy and relief is needed on the savings and investment side of the country's economy."
Further, Hart said that South Africa's industrial and sectoral policies also needed to be fundamentally amended. "The country's regulatory environment has increasingly become hostile to business and it is designed in such a way that it seems to protect the vested interests. We have too much regulation that supports the status quo of big businesses and not that of our smaller, entrepreneurial-type businesses.
"Without boosting small business, South Africa will never see the job creation that is needed. This has nothing to do with lowering interest rates or weakening the rand, but the cost of compliance that needs to be dropped. Regulatory authorities should act more like a police service, rather than being a process-orientated service."
Hart also said that the country needed a regime where labour negotiations were related to productivity rather than inflation, which would result in unions becoming allies of growth and company management, rather than enemies.
Investment solutions chief economist Chris Hart told Engineering News Online that 3,2% was "disappointing" as economic growth of around 3,6% was anticipated for the second quarter.
"A sturdy boost in the economy was expected over the World Cup period, but one should also account for the ‘holiday effect' that was created by the event, which would imply stronger growth in the services sectors and weaker growth in the country's production sectors."
He pointed out that the disheartening figure placed South Africa slightly above growth seen from developed countries, but below the strong growth experienced in emerging economies.
"One would have expected a stronger recovery by this stage, which may suggest that the authorities might be tempted to put in place additional measures for growth," Hart said.
Investec economist Kgotso Radira agreed, pointing out that the GDP outcome was weak despite the R93-billion that the National Treasury estimated was injected into the economy as a result of the World Cup. "Excluding this, GDP growth would have been much weaker than the 3,2%, showing that conditions remain challenging."
Radira said that given the weak growth in spite of favourable inflation outlook and the rand strength, Investec believed that an interest rate cut of 50 basis points was likely in September.
Nevertheless, speaking at the release of the GDP statistics in Pretoria, Stats SA director-general Dr Rashad Cassim said that sectors related to the World Cup event did show stronger growth rates. "This is evidence of some growth generated by the event, and we will see more of it in the next quarter, because the World Cup was spread over two quarters."
Even though quarter-on-quarter growth dropped from 4,6% in the first three months of the year, year-on-year growth climbed from a negative growth of -2,7% last year, to the 3,2% growth experienced this year.
Cassim told Engineering News Online that the main drivers behind the increase in economic activity during the quarter was the wholesale, retail, motor trade and accommodation industry that all climbed by 0,7 percentage points from the previous quarter.
Further, activity within the manufacturing industry rose by 1,1 percentage points, while government services were up with 0,5 percentage points.
In contrast, the mining and quarrying industry fell by -1,1 percentage points, owing to safety-related stoppages, stockpiling, labour issues and regulatory uncertainties.
Cassim said that if the third and the fourth quarter growth for the year was exactly equal to the first and second quarter of the year, South Africa was looking at a GDP growth of 2,3% for 2010.
Investec expected growth to remain below trend until 2012 as consumers remained overburdened by debt and rising job losses, and even then economists predicted growth rates of around 4%.
South Africa's Finance Minister Pravin Gordhan has recently called for a new sustainable growth path of 7% GDP growth for a period of 20 years, to alleviate unemployment rates, income inequality and serious health, education and infrastructural deficits in the country.
Hart emphasised that if the country was to even come close to such growth rates, it needed to "radically overhaul" its tax structures, industrial and regulatory structures, and seriously relook its labour legislation.
"Investors do not want to be faced with hostile unions and regulations.
"Growth is something you have to buy, which means that a country would need savings and a favourable investment climate to build additional economic capacity. A country could also resort to debt or cash float to acquire the capacity, but these methods are not sustainable over a longer period of time. This means that the burden side of our taxes need to be on the consumption side of the economy and relief is needed on the savings and investment side of the country's economy."
Further, Hart said that South Africa's industrial and sectoral policies also needed to be fundamentally amended. "The country's regulatory environment has increasingly become hostile to business and it is designed in such a way that it seems to protect the vested interests. We have too much regulation that supports the status quo of big businesses and not that of our smaller, entrepreneurial-type businesses.
"Without boosting small business, South Africa will never see the job creation that is needed. This has nothing to do with lowering interest rates or weakening the rand, but the cost of compliance that needs to be dropped. Regulatory authorities should act more like a police service, rather than being a process-orientated service."
Hart also said that the country needed a regime where labour negotiations were related to productivity rather than inflation, which would result in unions becoming allies of growth and company management, rather than enemies.
Ghana Says Oil Production To Start In December
Ghana is on track to pump its first barrel of crude in December but must be wary of seeing oil as the answer to all its problems, Vice President John Dramani Mahama said on Tuesday.
The West African State is poised to become one of the world's fastest-growing economies next year after its offshore Jubilee field comes on line.
It has said it is eager to avoid the "oil curse" of unevenly distributed wealth that has triggered unrest in other developing oil exporters.
"In December this year, Ghana will join the league of petroleum producing nations as commercial production begins in the Jubilee field," he told an oil and gas conference in the capital Accra. "Ghana cannot see the oil industry as a miracle wand to solve all problems."
He said the government was seeking to ensure transparency in the use of oil revenues from Jubilee, which he said holds about 1,6-billion barrels of crude, and to guarantee locals are employed in the sector.
Tullow Oil, operator of the Jubilee field, said in February output was scheduled to start in November, though the company and Ghanaian government officials have since said ouput would start by the end of the year.
The field will take four-to-six months to reach planned output of 120 000 barrels per day - a level it will maintain for three years, Ghana's energy minister told Reuters in an interview last month.
The government has projected oil production will boost GDP growth to 20% in 2011, up from around 6% in 2010, making it one of the world's fastest growing economies.
Mahama said on Tuesday that oil revenues based on current reserves could account for about 7% of Ghana's GDP.
Analysts have said a key challenge for the government will be to ensure petroleum revenues benefit ordinary Ghanaians, many of whom live on less than $2 per day.
The West African State is poised to become one of the world's fastest-growing economies next year after its offshore Jubilee field comes on line.
It has said it is eager to avoid the "oil curse" of unevenly distributed wealth that has triggered unrest in other developing oil exporters.
"In December this year, Ghana will join the league of petroleum producing nations as commercial production begins in the Jubilee field," he told an oil and gas conference in the capital Accra. "Ghana cannot see the oil industry as a miracle wand to solve all problems."
He said the government was seeking to ensure transparency in the use of oil revenues from Jubilee, which he said holds about 1,6-billion barrels of crude, and to guarantee locals are employed in the sector.
Tullow Oil, operator of the Jubilee field, said in February output was scheduled to start in November, though the company and Ghanaian government officials have since said ouput would start by the end of the year.
The field will take four-to-six months to reach planned output of 120 000 barrels per day - a level it will maintain for three years, Ghana's energy minister told Reuters in an interview last month.
The government has projected oil production will boost GDP growth to 20% in 2011, up from around 6% in 2010, making it one of the world's fastest growing economies.
Mahama said on Tuesday that oil revenues based on current reserves could account for about 7% of Ghana's GDP.
Analysts have said a key challenge for the government will be to ensure petroleum revenues benefit ordinary Ghanaians, many of whom live on less than $2 per day.
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