Dear Telkom, I told you so

People hate it when you say "I told you so". They hate it because you usually warned them correctly but they did not follow your advice.

The phrase "I don't want to say it, but I told you so" infuriates the non-listener even more.

Telkom is hearing those two phrases a lot.

Announcing its results last week, Telkom CEO Nombulelo Moholi reportedly revealed that the failed adventure into Nigeria had cost her company R9.8-billion, or half of its R19.4-billion market capitalisation.

Yes, half of what it's worth.

Considering when Telkom was making the initial investment, every analyst and industry commentator scratched his head in bewilderment and told Telkom not to do it.

I say "reportedly" because Telkom has not invited me to its events since even before my own "I told you so" moment - when I implored then CEO Reuben September, in November 2009, not to start a cellphone company, now called 8ta.

That little adventure has cost Telkom R1-billion so far and aims to be cash-positive in 2015. Yeah, right.

The biggest beneficiaries appear to have been rock band U2, whose tour to South Africa earlier this year was sponsored by 8ta.

Nigeria's Multi-Links was a disaster waiting to happen when Telkom foolishly bought a 75% stake in it for $280-million in May 2007. Amazingly, Multi-Links' assets were worth only R338-million at the time.

As disaster began to strike, Telkom foolishly bought the remaining 25% for $130-million in January 2009.

The problem with Multi-Links, as a ground-breaking engineer like September could tell you, is that it used an old standard for cellphone technology called code-division multiple access (CDMA). This analogue system has been replaced by the dominant standard, called global system for mobile communications (GSM), which is used in South Africa, Europe and most of Asia and America.

There are many reasons CDMA should be left behind on the technology scrapheap - and it would have by now if it weren't for expensive installations and assets - not least of which is the price of the handsets. These are more expensive than GSM phones and a key consideration in the mostly pre-paid market in Africa, where cheap GSM handsets are abundant.

Nigeria, with the largest population on the continent, is a dream for anyone wanting to expand in Africa. But failing to understand its market conditions, and corporate politics have cost many would-be conquerors dearly, including Vodacom and now Telkom.

The other reason people hate "I told you so's" is because the warner generally likes to gloat a little. Telkom-bashing is a national pastime. Taking delight in, and ranting about, its continued lack of management clarity, repeated failures, frequent lack of common sense, appalling customer service and inexcusably high prices is sadly just part of life in South Africa.

But, in this instance, kicking Telkom when it is down is not productive. Telkom is a national asset. We need it. We need a strong communications backbone, which right now Telkom has and which we taxpayers have funded over the years.

Moholi argued that local-loop unbundling, due to be completed by November, is a "major risk" for Telkom.

Shame. Taxpayers paid for this "last mile" of infrastructure that connects houses and business to the exchange, and which, by letting other operators access it, will increase competition.

Competition is the best thing that has happened to telecoms in this country, even as it has exposed Telkom's appalling lack of foresight, poor management decisions and simple absence of common sense.

The more competition the better our telecoms will be.

• Shapshak is editor of Stuff magazine