The Big Winners and Losers from the Vodacom/Neotel Tie-Up

The biggest announcement of the month – and possibly of the year for the ZA IT world – is that Vodacom has concluded its negotiations to acquire Neotel. 

The big winner is obviously Vodacom, which now has a fixed-line infrastructure so that it can offer a full range of services. 

This will make it an even bigger player in South Africa.

The big loser is likely to be Telkom, which struggled and failed to launch an efficient mobile offering.   It is still an important player with a massive network, but the latest announcement that it is targeting white males in a new retrenchment exercise has led to a lot of resentment and annoyance.. especially among white males.

Another loser is likely to be DSTV, the dominant supplier of satellite TV services.   If Vodacom and Neotel can really get their act together with a TV offering into our living rooms – which is something Telkom has disastrously failed to do – and can find the right partners and content, it should be able to poach a lot of customers from the established player.

Competition is only good if you have robust and well-run competitors, and I have a strong suspicion that the Vodacom/Neotel union will bring the SA market exactly what it needs.

Which should mean that another big winner – will be the consumer. 

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