Telkom CEO Sipho Maseko will step down on 30 June 2022 after nine years at the helm of the telecommunications company.
Maseko joined Telkom on 1 April 2013 when the organisation faced severe challenges. The company was running at a loss, it had a bloated workforce, and its share price traded at an all-time low.
After Maseko took the reins, the company started to recover. The market also welcomed his strategy of staff cuts and focusing on Telkom’s mobile division.
Two years after Maseko joined Telkom, the company’s share price was trading at over R80 per share — a 400% increase.
Looking back at his tenure as Telkom CEO, Maseko said his mission was clear — save the company, make it sustainable, and allow it to hold its own relative to its peers.
“I’m broadly satisfied that this mandate has been fulfilled. Today, Telkom is a stable company. We have de-risked our business, and we have a clear strategy for each of the business units,” he said.
“We are on a clear path to unlocking value for our shareholders, indeed all our stakeholders. It wasn’t an easy ride, but our perseverance has paid off.”
Many analysts and industry players commended Maseko for turning Telkom around.
Market analyst Simon Brown said Maseko had done a brilliant job positioning the company for future growth in the mobile data market.
Mergence Investment Managers head of equities Peter Takaendesa said Maseko had done a great job at changing the company’s direction.
World Wide Worx MD Arthur Goldstuck said Maseko leaves Telkom “barely recognisable from the old fixed-line operator that it was and seemingly unresponsive to technology”.
Not everyone was complimentary. Communication Workers Union (CWU) secretary-general Aubrey Tshabalala said that there was a jobs bloodbath at Telkom under Maseko’s leadership.
Instead of growing the company and increasing employment, Maseko slashed jobs and sold assets to bolster the company’s balance sheet.
“His relationship with unions was characterised by arrogance and led to an erosion of organised labour at Telkom. We say good riddance,” Tshabalala told News24.
To get an objective view of Maseko’s performance at Telkom, MyBroadband looked at what the numbers said.
They show that Maseko did well in some departments — like mobile growth — while the company suffered in others, like fixed-line performance.
Here is a look at the performance of Telkom during Sipho Maseko’s tenure as CEO.
Telkom’s operating revenue increased from R32.143 billion in 2013 to R42.939 billion in 2021.
The increase in revenue was partly bolstered by the acquisition of BCX in 2015, which generated R6.512 billion per year before Telkom acquired it in 2015.
Apart from the bump in revenue after the BCX acquisition, revenue has been relatively flat for Telkom.
During Maseko’s tenure, Telkom’s profit was mostly range-bound between R2 billion and R4 billion.
In his first year – 2014 – profit jumped to R3.9 billion from a loss the previous year. It would never reach this level again, and in the last financial year, Telkom’s profit for the year was R2.4 billion.
Telkom share price
Telkom’s share price increased from around R14 per share to over R40 per share during Maseko’s time as CEO.
Most of this increase happened in the first two years after Maseko took over and started to cut costs.
Within the first two years after Maseko’s appointment, Telkom’s share price increased from R14 per share to over R80 per share.
Over the last five years, however, the share price declined from R63 per share to R40 per share – a 36% drop.
The chart below shows Telkom’s share price over the last five years.
Telkom mobile subscribers
Maseko will be remembered for transforming Telkom from a fixed-line provider to a fully converged ICT provider.
He focussed heavily on Telkom’s mobile division, which saw its active mobile subscribers increase from 1.5 million to 15.3 million.
Telkom also overtook Cell C as the third-largest mobile operator in South Africa during Maseko’s tenure.
Telkom fixed-line subscribers
Maseko prioritised Telkom’s mobile network, and the company continued to bleed fixed-line subscribers over the last eight years.
He opened the door for companies like Vumatel to take market share from Telkom in the fixed broadband market.
Only time will tell whether Maseko’s strategy to relinquish its complete dominance in the fixed-line broadband market in favour of a mobile play was the right thing to do.
The chart below shows Telkom’s fixed-line numbers during Maseko’s tenure as Telkom CEO.