Shake up at Sentech
Sentech has been a struggling parastatal for years, something which was clearly illustrated by its inability to make its MyWireless broadband product work in a vibrant and growing broadband market where its competitors flourished.
A recent Business Report article said that the struggling signal distributor is budgeting for a net loss of R123 million for the 2009/10 financial year as a result of discontinued operations such as MyWireless.
“This is according to a scathing report compiled by the task team Communications Minister Siphiwe Nyanda appointed last year to investigate turnaround strategies for ailing state-owned broadcast entities Sentech and the SABC,” the Business Report article said.
“Sentech’s loss could increase to R214m if losses of R91m by broadband services MyWireless, BizNet and Vsat are included. This amount was not disclosed to the Department of Communications by Sentech in its corporate plan.”
Nyanda today officially unveiled the findings from the task team about Sentech. According to the Communications Minister the task team found that Sentech is in urgent need of a turnaround strategy, and that immediate and drastic action is needed to avoid the collapse of Sentech.
The task team found that Sentech’s situation was partly a cause of the new legal and regulatory regime that has opened up the market for new entrants. They added that a lack of a clear and comprehensive ICT framework, a misaligned business strategy in support of national service delivery agenda and the state of the market in which Sentech operates all contributed to the parastatal’s decline.
The task team made a four suggestions as to how to solve Sentech’s problems:
- Reposition Sentech in terms of its core competence as broadcasting signal distributor
- Sentech to leverage core competence to look for opportunities in the continent where it is already doing business
- Sentech to continue with diversification strategy of growing the telecommunications business
- Sentech to transfer its non-broadcasting ECNS and non broadcasting ECS businesses to Infosat
The task team also offered strategic recommendations:
- Exploitation of Sentech’s unused licenses through public- private partnerships
- Clarity regarding Sentech’s funding going forward
- Sentech should remain responsible for encoding and multiplexing
- Lobby government to develop legislation to guarantee its position as the preferred supplier of broadcast signal in SA
- Sentech should discontinue all loss making ventures
- Government should urgently address Sentech’s DTT infrastructure shortfall
Nyanda said that he will engage with Sentech’s board directly before making any decisions about the future of the company. “I don’t think there is an explicit recommendation for dismissal (of the Sentech board). What I am going to do is consider all the recommendations that have been made and make a decision going forward,” said Nyanda.
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