David Lerche. Picture: SUPPLIED
David Lerche. Picture: SUPPLIED

In this edition of Business Day Spotlight, we talk about the state of SA mobile network providers listed on the JSE.

Our host Mudiwa Gavaza is joined by David Lerche, head of equities at Sanlam Private Wealth.

Join the discussion: 

Over the past year, tech companies around the world have done well due to the increased demand for communications and internet services brought on by the pandemic.

Business Day Spotlight host Mudiwa Gavaza. Picture: DOROTHY KGOSI.
Business Day Spotlight host Mudiwa Gavaza. Picture: DOROTHY KGOSI.

The discussion begins by looking at how and if this trend has worked in the same way for local telecoms operators. Lerche says it has not, pointing out that the business models for many of the large technology firms, such as Google and Facebook, was different from that of MTN or Vodacom.

This is mainly because of costs. While internet firms benefit from network effects, adding new users at little to no cost, mobile providers tend to spend billions each year developing and growing their network infrastructure to cope with increased demand.

Lerche spends time focusing on the investment case for each of the large listed telecoms operators, Vodacom, MTN and Telkom, as well as looking at growth prospects for each company and how telecoms operators performed relative to their JSE counterparts over the past year. 

The discussion also touches on how ownership structures of the different operators has manifested in their strategies, and ends off with an outlook for telecoms companies for the rest of 2021.

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 Business Day Spotlight is a MultimediaLIVE production.


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