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Online Share Trading

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Data to the rescue

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SimonPB
Valued Contributor
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24 REPLIES 24
MarkD
Contributor
im in for vod for the long term personally.
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Preston
Super Contributor
What are you smoking Simon?
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THRESHOLD
Super Contributor
Data is a becoming a free commodity (or nearly so). Content has value! I cannot see a long term future for MTN and VOD - they need to change their business models. They have charged prohibitive rates for calls and built their market caps on this. There is no way they can survive on the paltry income they will receive from data "routing" in the years to come. Ultimately all "voice" will move onto the data side (that's all it is anyway.) Just look what happened to TELKOM - and she had 100 years of legacy business to survive on.
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Not applicable
Ja Simon, the telco business model in Africa is changing rapidly. There is a serious price war going on right now. Calls rates are down to ZAR 20c per minute. What is interesting is the way the operators are outsourcing their assets and leasing them back. This is creating big cash injections into their models, at the potential risk of higher opex costs further down the line. And we are talking big money here - $100k per site, with MTN Uganda having 1000 sites. That is a $100m cash injection. Nigeria and SA will come soon, I am sure - and we would be talking 4 or 5 times that number each.
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Preston
Super Contributor
What information that is contained in their financial statement that has prompted that view? , or is that a subjective view that was expressed?
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Preston
Super Contributor
Sale and leaseback is an effective tool of leverage and it is tax deductible.
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THRESHOLD
Super Contributor
Their financial statements are "backward-looking." You cannot invest purely on that basis. You need look no further than the construction stocks for an example of this! These are really just IT companies that landed a licence to sell data, masquerading as old-style telephones companies.
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Preston
Super Contributor
backward-looking, why?
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THRESHOLD
Super Contributor
They are based on historic data. "They fairly present (hopefully) the results of the company and its financial status for the year then ended" as per the auditors report.
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THRESHOLD
Super Contributor
It is also important to note that: ALL Views are subjective. That is the nature of a "view."
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Preston
Super Contributor
Company Budgets are based on a projection of historical data and that projection is based on company strategies. Do you not believe that MTN has factored in all these growth impeding variables?
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Not applicable
I would hardly call MTN an IT company. They invest Billions in capital assets in order to provide a chargable service. Their margins might be squeezed, but they are still in complete control of the pricing. You need to view this in much the same way as a branded commodity like what Tiger Brands sell. Capex in production, Capex in distribution, low margins and pump out the volumes. Only difference with an operator, is that they can work on all kinds of vendor financed models and accounting tricks to improve margins.
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THRESHOLD
Super Contributor
Of course not - the directors almost always get it wrong eventually. It is their job to run the company, paint a rosy picture to sell to you - the shareholder (or potential shareholder) - and most importantly - draw a nice fat salary. These companies are babies - they were born in the nineties and their tech is at least that old. Just look how many tech companies stayed the course. They have proven nothing yet.
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THRESHOLD
Super Contributor
MTN is an Information Technology Company! ACER invests more in building her brand than MTN and VOD combined - and you would not argue that she is an IT company. She also invests billions in plant etc. to build kit that will be obsolete 2 years later.
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Preston
Super Contributor
Now we are drifting off the topic.
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Preston
Super Contributor
That "rosy picture" you speak about are actually audited as per your previous post.
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fusion12321
Frequent Contributor
preston thanks for chatting with the old coot. its good for the geriatric if his brains gets some stimulation sometimes. not good for oldtrash to always chat to himself.
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sponono
Super Contributor
could not agree with you more. should go online and see the level of unhapiness about Vodacom's offering. perfect short on fundamentals
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richardw
Super Contributor
Auditors aren't going to challenge any future-looking rosy pictures based on an extension of a monopoly that relies on nobody innovating around the incumbents. They're there to say 'yes, these numbers add up.'
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