Uys set to take over at Vodacom
Vodacom chief executive Alan Knott-Craig is expected to announce details of his retirement tomorrow, paving the way for chief operating officer Pieter Uys to take over the helm at SA’s largest cellphone company by subscriber numbers.
Knott-Craig would not confirm the reports , but there is some expectation that he will announce that he is to leave Vodacom in September.
But while Uys is his likely successor, an international candidate is also waiting in the wings.
The unknown international candidate is most likely to be backed by Vodafone, the British cellphone company that, for now, owns half of Vodacom. Vodafone wants to increase its stake in Vodacom by 12.5%, and take control of the company it uneasily shares with Telkom. Vodafone refused to comment on Friday.
Knott-Craig was officially meant to retain his position until later next year but it is an open secret that he planned to bring this date forward. He will be presenting Vodacom’s financial results tomorrow, and it is expected that he will also use the opportunity to prepare the market for his stepping-down.
It is understood that Uys is Vodacom’s “only internal candidate”, although Shameel Aziz Joosub — who heads Vodacom SA — was, until recently, a strong contender.
While Uys is an operations man, Joosub’s talents are more financial. Uys came to Vodacom from the SA Post Office while Joosub has a background as an entrepreneur. Uys is said to share many of Knott-Craig’s “visionary” and strategic-thinking characteristics.
While Uys has emerged as the Vodacom candidate for the job, there is a feeling among many in the company that there is little to choose between the two men.
There is a possibility that Joosub might take a senior position in Vodafone.
However, should Vodafone take a majority stake, it could nominate its own CEO or argue for somebody who could steer Vodacom’s global expansion.
Renaissance Asset Managers’ Khulekani Dlamini said that while there is a depth of talent in Vodacom, the company may require someone with international expertise to oversee its future strategy under Vodafone. Tomorrow both Telkom and Vodacom announce results for the year to March.
But financial performance will be of only passing interest; what is eagerly anticipated is an indication of a way forward for both companies, which are the subjects of takeovers — Telkom by Tokyo Sexwale’s Mvelaphanda and Vodacom by Vodafone. Mvelaphanda, in a consortium that includes the US-based Och- Ziff Capital Management, is bidding for Telkom.
Telkom was valued at R77- billion, but since the corporate activity it has been valued at much more, based largely on growing estimates of the value of its Vodacom stake.
Vodacom will show strong growth in subscribers, revenue and earnings in the year to March, and it is the positive driving force behind Telkom.
The state-owned telecommunications company will report a continued trend of lower revenue and earnings.
The only increase will be reflected in the contribution from Vodacom and the rise, off a small base, in broadband users.
Vodacom officially announces results tomorrow but was obliged to issue a summary when Vodafone announced its results.
In the year to March, Vodacom increased customers by 12.7% to 34million. Its revenue increased by 17% to R48.2-billion and its profit from operations grew by 15% to R12.5-billion.
Vodacom is one of South Africa’s two major cellphone network operators and its 34million customers are in South Africa, Tanzania, the Democratic Republic of Congo, Lesotho and Mozambique.
According to Vodacom, it is the market leader in all of these countries , with the exception of Mozambique. It says it has 58% of the South African market.
Telkom’s interim results showed a 15% decline in headline earnings, and analysts expect the trend to continue in the full year. Plagued by financial and operational underperformance and management issues, Telkom continues to show that it is finding it difficult to grow.
At the interim stage, its fixed- line operating profit dropped more than 19% and net profit dropped 46.6%. This was partly offset by the 15% rise in mobile operating profit and 17% rise in mobile operating revenue, supplied by Vodacom.
Telkom has been South Africa’s monopoly fixed-line telephone company, prior to the recent launch of Neotel.
Telkom is 39.4% owned by the government, 13% by the Public Investment Corporation and 5.8% by the Elephant Consortium. Its fixed lines have dropped slowly since 2003 to 4.6million. Vodacom recently announced a R7.5-billion empowerment deal with a consortium led by Thebe Investments and Royal Bafokeng Holdings.
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