Telkom Media bosses and their staff were paid huge bonuses last year despite having hardly done a day’s work. The company, a subsidiary of Telkom, dished out the bonuses in a bid to retain the nearly 100-strong workforce hired after the company won a pay-TV licence in 2007.
Major shareholder Telkom has already spent well over R400-million to help launch the company, but in May last year the Telkom board surprisingly announced that it had decided to sell its stake in the operation.
Telkom is planning to reduce its funding of Telkom Media from R7.5- billion to R5.3-billion.
Because of this, preparations for the launch of the pay-TV service and news channel — initially scheduled for the middle of last year — were put on hold and broadcasting equipment worth millions of rands remained idle in warehouses.
Staff, including senior managers, journalists and technicians, are still reporting for work every day at the company’s premises in Centurion — but have nothing to do.
Two senior staffers who did not want to be named confirmed that bonuses of at least a month’s salary had been paid to all staff.
One said he and some of his colleagues were “demoralised” at having to go to work every day for no reason.
“People come to work for an hour or two and then they all go home. Even if you wanted to work, there is nothing to do. Everyone has a desk, computer and telephone, but there is no work.”
He said staff were concerned about negotiations with prospective buyers of Telkom Media as they did not know if they would keep their jobs.
Salaries are paid monthly and staff receive full benefits including medical aid and pensions.
Telkom Media spokesman Chris van Zyl on Thursday refused to comment on the bonuses.
Communication Workers’ Union national treasurer Richard Poulton reacted with outrage when told of the bonuses.
“We believe this is very inappropriate. Telkom Media is making huge losses financially. It is not generating any revenue for Telkom. Bonuses should be linked to performance of the company and Telkom Media is not performing and there is no justification for bonuses,” he said.
Telkom Media has minority shareholders — including Given Mkhari’s MSG Africa Group — but Telkom is responsible for operational costs.
According to Telkom’s annual report for the 2007-08 financial year, Telkom Media spent R88-million on “employee expenses”. In total, the company incurred operational expenses of well over R151-million.
Telkom has since announced that a loan of R430-million advanced to Telkom Media is “fully impaired”.
The company was one of four awarded a pay-TV licence by the comminications industry regulator, the Independent Communications Authority of South Africa (Icasa), in 2007.
But Telkom Media was seen as the only credible competitor for incumbent operator MultiChoice — because of Telkom’s stake in it.
There is continued speculation about a potential buyer for Telkom Media, which has former Avusa CEO Connie Molusi as its board chairman.
In a statement this week, Telkom said it had not managed to sell its stake “due to governance issues, relating to the interested consortium”.
A sale was supposed to have been finalised in December last year, but Telkom said difficulties had arisen.
The company said it would make a final announcement on the sale before the end of this month.
The sale will have to be approved by Icasa, which is anxious to introduce competition to the pay-TV market.
Business Times has established that the regulator is working on draft regulations to level the sector playing field in terms of content.
MultiChoice has dominance in most areas, such as local sport, but Icasa wants to ensure that no one has exclusive rights to content.
Another new competitor is On Digital Media, which plans to start broadcasting later this year.
E.tv was also to have been a contender, but instead of a mooted satellite operation, it opted to be a content provider on MultiChoice’s DStv network.
Telkom Media had planned to offer subscription content over both satellite TV and Internet TV.
The company was to be in direct competition with MultiChoice in the satellite TV space while also introducing an innovative system of digital television via the Internet.