Summary of Telkom Group's Systemic Technological Disruption Overview Telkom Group SOC, a South African communications and IT company, was founded in 1991. It initially thrived due to a legally protected fixed-line monopoly and government support. Telkom listed on the JSE in 2003, with its share price peaking at R169.00. Initial Success and Monopoly Telkom dominated the market, owning 50% of Vodacom, the largest mobile operator in South Africa. The monopoly allowed high telecom prices, ensuring substantial profits and investor confidence. Decline and Market Challenges By 2010, Telkom faced significant challenges: Declining fixed broadband market share. Struggles in the saturated mobile market. Financial difficulties leading to large-scale retrenchments. A significant drop in share price, from nearly R100 to under R30 in six months. Missed Opportunities Telkom's major mistake was selling its stake in Vodacom, losing out on the booming mobile market. The company was left focusing on traditional fixed-line services during a shift towards mobile and internet services. Financial Struggles (2010-2013) Revenue declined modestly, but net profits plummeted due to an inflexible cost base and slow new business growth. The share price dropped from ~R37 in 2010 to R12 in April 2013. Technological Disruption Telkom's core product, circuit-switched fixed-line telephony, faced substitution by VoIP services. The rise of data services (email, messaging) reduced demand for voice communication. Price competition emerged from switchless service providers exploiting new technologies and regulatory changes. Organizational Changes Telkom created a separated wholesale business unit to serve competing service providers, disrupting its traditional retail channels. Incremental vs. Transformative Changes Automation and customer data exploitation showed incremental impacts. Online sales, bundling, and new value propositions indicated evolutionary changes. Strategic Responses and Lessons Telkom faced multiple disruptions: demand, production, and marketing. Anticipating and responding to these disruptions with effective strategies could have mitigated negative impacts. A more successful diversification and retail channel response strategy might have offset some financial losses. Despite predictable production disruptions, Telkom responded well by developing its own mobile infrastructure and focusing on next-generation fixed networks. Conclusion Telkom's experience highlights the importance of strategic foresight and adaptability in the face of technological and market disruptions. Develop the PESTLE Opportunity & Threat table for the South African telecommunications industry, now and in the 3 – 5 year time-frame. You can put it in a table format.

Summary of Telkom Group's Systemic Technological Disruption Overview Telkom Group SOC, a South African communications and IT company, was founded in 1991. It initially thrived due to a legally protected fixed-line monopoly and government support. Telkom listed on the JSE in 2003, with its share price peaking at R169.00. Initial Success and Monopoly Telkom dominated the market, owning 50% of Vodacom, the largest mobile operator in South Africa. The monopoly allowed high telecom prices, ensuring substantial profits and investor confidence. Decline and Market Challenges By 2010, Telkom faced significant challenges: Declining fixed broadband market share. Struggles in the saturated mobile market. Financial difficulties leading to large-scale retrenchments. A significant drop in share price, from nearly R100 to under R30 in six months. Missed Opportunities Telkom's major mistake was selling its stake in Vodacom, losing out on the booming mobile market. The company was left focusing on traditional fixed-line services during a shift towards mobile and internet services. Financial Struggles (2010-2013) Revenue declined modestly, but net profits plummeted due to an inflexible cost base and slow new business growth. The share price dropped from ~R37 in 2010 to R12 in April 2013. Technological Disruption Telkom's core product, circuit-switched fixed-line telephony, faced substitution by VoIP services. The rise of data services (email, messaging) reduced demand for voice communication. Price competition emerged from switchless service providers exploiting new technologies and regulatory changes. Organizational Changes Telkom created a separated wholesale business unit to serve competing service providers, disrupting its traditional retail channels. Incremental vs. Transformative Changes Automation and customer data exploitation showed incremental impacts. Online sales, bundling, and new value propositions indicated evolutionary changes. Strategic Responses and Lessons Telkom faced multiple disruptions: demand, production, and marketing. Anticipating and responding to these disruptions with effective strategies could have mitigated negative impacts. A more successful diversification and retail channel response strategy might have offset some financial losses. Despite predictable production disruptions, Telkom responded well by developing its own mobile infrastructure and focusing on next-generation fixed networks. Conclusion Telkom's experience highlights the importance of strategic foresight and adaptability in the face of technological and market disruptions. Develop the PESTLE Opportunity & Threat table for the South African telecommunications industry, now and in the 3 – 5 year time-frame. You can put it in a table format.

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Summary of Telkom Group's Systemic Technological Disruption

Overview

Telkom Group SOC, a South African communications and IT company, was founded in 1991.
It initially thrived due to a legally protected fixed-line monopoly and government support.
Telkom listed on the JSE in 2003, with its share price peaking at R169.00.

Initial Success and Monopoly

Telkom dominated the market, owning 50% of Vodacom, the largest mobile operator in South Africa.
The monopoly allowed high telecom prices, ensuring substantial profits and investor confidence.

Decline and Market Challenges

By 2010, Telkom faced significant challenges:
- Declining fixed broadband market share.
- Struggles in the saturated mobile market.
- Financial difficulties leading to large-scale retrenchments.
- A significant drop in share price, from nearly R100 to under R30 in six months.

Missed Opportunities

Telkom's major mistake was selling its stake in Vodacom, losing out on the booming mobile market.
The company was left focusing on traditional fixed-line services during a shift towards mobile and internet services.

Financial Struggles (2010-2013)

Revenue declined modestly, but net profits plummeted due to an inflexible cost base and slow new business growth.
The share price dropped from ~R37 in 2010 to R12 in April 2013.

Technological Disruption

Telkom's core product, circuit-switched fixed-line telephony, faced substitution by VoIP services.
The rise of data services (email, messaging) reduced demand for voice communication.
Price competition emerged from switchless service providers exploiting new technologies and regulatory changes.

Organizational Changes

Telkom created a separated wholesale business unit to serve competing service providers, disrupting its traditional retail channels.

Incremental vs. Transformative Changes

Automation and customer data exploitation showed incremental impacts.
Online sales, bundling, and new value propositions indicated evolutionary changes.

Strategic Responses and Lessons

Telkom faced multiple disruptions: demand, production, and marketing.
Anticipating and responding to these disruptions with effective strategies could have mitigated negative impacts.
A more successful diversification and retail channel response strategy might have offset some financial losses.
Despite predictable production disruptions, Telkom responded well by developing its own mobile infrastructure and focusing on next-generation fixed networks.

Conclusion

Telkom's experience highlights the importance of strategic foresight and adaptability in the face of technological and market disruptions.

Develop the PESTLE Opportunity & Threat table for the South African telecommunications industry, now and in the 3 – 5 year time-frame. You can put it in a table format.

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