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Cape Town - Consumers could expect more telecommunication tariff cuts as competition increaseds, Telkom said in a Securities Exchange Commission (SEC) filing in New York.
This is in addition to Telkom's latest tariff cuts of an average 2.1% which kicked in on August 1.
The fixed-line phone giant said increased competition was going to dent its tariffs and market share and it foresaw a cost increase in its fixed-line division.
Telkom also warned that increased competition could lower its growth rate and present fat profit margins.
It also said in the filing that Vodacom, in which it held a 50% stake, could lower its tariffs in future due to increased competition.
In terms of the SEC rules, US-listed companies must publicise risks which could have an impact their future operations.
This includes the entrance of a second fixed-line operator Telecommunications Ltd into the SA market, increased rivalry from MTN, Vodacom, Cell C and Virgin Mobile and the licensing of additional operators in under-serviced areas, said the SEC filing.
Telkom also is worried that it could lose government business to the SNO or other rivals.
Government policies and regulations aimed at deregulating the telecoms industry further, could also benefit its competitors, said Telkom.
Sentech, Vodacom and MTN's high-speed internet access are highlighted as the biggest threat to Telkom's data services, while the increasing use of cellphones could knock its traditional land lines.
Fixed-line penetration amounts to about 10%, a figure that's not likely to change in the near future.
On the other hand, cellphone penetration climbed from just 2.4% in 1997 to about 71% at the end of March this year, stated the filing.
Telkom also warned that cable theft, vandalism, network and payphone fraud and unlicensed operators are a threat to its profitability.
Telkom, which axed more than 31 000 of its workers, expected its workforce to grow again in the future, and this, also, would also weigh on expenses.
The telecommunications giant employs more than 25 000 people.