{"id":548507,"date":"2006-04-12T07:04:10","date_gmt":"2006-04-12T07:04:10","guid":{"rendered":"http:\/\/localhost:8888\/wordpress\/technology\/548507-molotsane-needs-balance-to-steer-telkom-into-competitive-waters.html"},"modified":"2006-04-12T07:04:10","modified_gmt":"2006-04-12T07:04:10","slug":"molotsane-needs-balance-to-steer-telkom-into-competitive-waters","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/technology\/548507-molotsane-needs-balance-to-steer-telkom-into-competitive-waters.html","title":{"rendered":"Molotsane needs balance to steer Telkom into competitive waters"},"content":{"rendered":"

Reserved, unfl appable and at times imposing, Nxasana steered Telkom through some difficult times, facing down critics both within and outside the organisation by sticking to a vision of transforming Telkom into a world-class business. Molotsane, on the other hand, is like a ball of fire, brimming with enthusiasm and ideas. Quick to laugh but equally firm in his vision for Telkom, Molotsane has taken over the helm of Telkom as it moves into an era of what we hope will be unprecedented competition. <\/font><\/p>\n

Nxasana ruled during a different time in Telkom\u2019s history. Joining in early 1998, just over a year after government sold a 30% stake in Telkom to US and Malaysian investors, he took the group from a partially privatised monopoly to a listed entity. He was fiercely independent, determined to ensure that Telkom overcame its image as a bloated state owned enterprise. <\/font><\/p>\n

This did not always make him popular with government, which remained Telkom\u2019s single largest shareholder after its 2003 listing on the JSE and the New York Stock Exchange (NYSE). Much of the tension was kept behind closed doors but I did witness one incident which has stayed with me. <\/font><\/p>\n

Sitting in the foyer of the NYSE, waiting to enter the trading floor on the day of Telkom\u2019s listing in March 2003, across the room I noticed then public enterprises minister Jeff Radebe talking heatedly to Nxasana. Nxasana was listening calmly. Radebe, it turned out, was annoyed that Telkom had been quoted as saying it would be forced to retrench as many as 10000 workers in order to stay ahead of the global telecoms game. This quote had appeared on the day Telkom was due to list, sending the trade unions into a tailspin and generally placing a dampener on the day. <\/font><\/p>\n

There were denials all round at a news conference and Telkom\u2019s listing was roundly declared a great success. <\/font><\/p>\n

Undaunted, Telkom went on to reduce its workforce by 6400 people between March 2003 and March 2005. It was no doubt a painful exercise, but necessary to bring Telkom in line with global norms. Certainly, there were some missteps along the way \u2014 perhaps the biggest being the R35bn investment in underserviced phones, with almost half the 2,1-million lines subsequently disconnected. <\/font><\/p>\n

But under Nxasana, Telkom exploited its fixed-line monopoly to the full and the market liked what it saw. Telkom\u2019s share price had an almost unfettered run from the R28 it listed at, to a high of R170 in February this year. <\/font><\/p>\n

Will Molotsane be able to do the same? It\u2019s a difficult comparison as he has taken over a group that faces <\/font><\/p>\n

These are exactly the challenges that were faced by incumbents in Europe and other parts of the world in early part of 2000. It\u2019s no mystery why Telkom\u2019s stock has taken a beating. Revenue, dividends and margins will be hit in the short term as competition ratchets up and Telkom spends more than R30bn over five years on rolling out its new broadband network. <\/font><\/p>\n

In many ways, it\u2019s a fairly cautious approach; perhaps too cautious. But one can only imagine the market\u2019s reaction if Telkom had gone the route of British Telecom (BT), which is spending about R100bn replacing its entire network with a new system based on internet technology. Within three years, BT will have the most advanced network in the world. This will help Britain lead the market in dealing with the rapid convergence of telephone, broadband and television. <\/font><\/p>\n

There is, frankly, no alternative for Telkom but to ignore the short-term concerns of the market and invest for the long term. Molotsane seems <\/font><\/p>\n

His biggest challenge will be trying to convince government and the Independent Communications Regulator not to throw the baby out with the bathwater when opening the market to greater competition. <\/font><\/p>\n

Telkom is strongly supporting \u201cphased\u201d competition but government is serious about lowering the cost of doing business and sees competition as a key lever for doing so in the telecoms market. <\/font><\/p>\n

If Telkom pushes too hard, it could be accused of using its dominant position to stifle competition and thus impede SA\u2019s economic growth. If it treads too softly, it risks losing massive market share. It\u2019s a delicate balancing act but it\u2019s been done elsewhere. Molotsane will have to show it can be done here, too. <\/font><\/p>\n

INet-Bridge ||\u00a0 <\/font>Discuss this article<\/font><\/a> <\/font><\/p>\n

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\n","protected":false},"excerpt":{"rendered":"

IT\u2019S difficult to think of two more different personalities than Sizwe Nxasana, the former CE of telecommunications group Telkom, and Papi Molotsane, the current one.<\/p>\n","protected":false},"author":23,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[17],"tags":[],"class_list":["post-548507","post","type-post","status-publish","format-standard","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/548507"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=548507"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/548507\/revisions"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=548507"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=548507"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=548507"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}