{"id":549073,"date":"2006-06-06T01:49:08","date_gmt":"2006-06-06T01:49:08","guid":{"rendered":"http:\/\/localhost:8888\/wordpress\/technology\/549073-moneyweb-interview-with-papi-moletsane.html"},"modified":"2006-06-06T01:49:08","modified_gmt":"2006-06-06T01:49:08","slug":"moneyweb-interview-with-papi-moletsane","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/technology\/549073-moneyweb-interview-with-papi-moletsane.html","title":{"rendered":"Moneyweb Interview with Papi Moletsane"},"content":{"rendered":"

MONEYWEB: With us in the studio is Ana Monteiro, she\u2019s our IT and communications writer \u2013 and I just wonder what you thought, Ana, of the Telkom result that was published today?<\/font><\/p>\n

ANA MONTEIRO: It\u2019s tough to say what I thought, but the market was definitely quite happy towards the beginning of the day, and it kind of dropped off towards the end. If I\u2019m not mistaken, the share closed about 0.2% lower. But yes, it was a very good result. Shareholders were rewarded with a large dividend \u2013 same as last year \u2013 a total dividend of R9 for the year to the end of March. Also, there was an increase because of the share buybacks that Telkom has announced \u2013 it\u2019s R2bn worth of share buybacks which, according to Coronation analyst Pallavi Ambekar, took the total amount that shareholders were actually getting back to R12.77 a share. So most impressive if you are a Telkom shareholder.<\/font><\/p>\n

MONEYWEB: We were hoping that Papi Moletsane would come through on the line \u2013 we\u2019re still waiting to see if we can get him. Meantime, I don\u2019t know if the Telkom customers will be as delighted with this result as the shareholders.<\/font><\/p>\n

ANA MONTEIRO: I suppose they will be quite irked to hear that the company is making quite a lot of money. But Telkom did announce some price reductions on its high-speed Internet, that\u2019s its broadband side. Broadband prices on average are coming down by 24% \u2013 that\u2019s for the line rental, the monthly line rental that people pay. Quite interesting is that I went to the results presentation this morning, and I saw Rudolf Muller from MyADSL, who has been campaigning for those prices to come down. He said that studies have shown, and there was a study released last week by Genesis Analytics saying that prices need to come down by 70%-odd in order for our pricing to be comparable to that of international markets. So while the 24% reduction is indeed welcome, and should see people utilising or getting into the service, it\u2019s got far to go in order for us to be comparable with overseas markets.<\/font><\/p>\n

MONEYWEB: Dave, did you have a look at the Telkom results?<\/font><\/p>\n

DAVID SHAPIRO: There is so much to digest and there are so many interesting aspects of it. As Ana was talking, I mean you’re talking about reductions in the fixed line operation of the market. Against that \u2013 and the question I\u2019m going to ask Ana is \u2013 can they compensate if they are able to offer greater service on the Internet and on data? Are they able to compensate by perhaps smaller margins?<\/font><\/p>\n

MONEYWEB: On the line now is Papi Moletsane, CEO of Telkom. Glad the lines are working, Papi, welcome. Congratulations, your numbers certainly impressed people and a nice dividend too.<\/font><\/p>\n

ANA MONTEIRO: Papi, I would just like to know \u2013 now that you\u2019ve been at the helm of Telkom for just under six months, this makes it the first time that you\u2019ve steered the company to full-year results. There have been a lot of tough decisions to make, especially in the wake of competition, having to re-invent the fixed line business to remain competitive, and complaints about high prices. It\u2019s been tough, admittedly, but what\u2019s it been like for you?<\/font><\/p>\n

PAPI MOLETSANE: Ana, you\u2019ve actually captured the gist of my tenure in Telkom. It is characterised by those kind of factors. It\u2019s been tough, it\u2019s been a very difficult environment. But, having said that, it\u2019s been quite exciting because the industry itself is quite dynamic. It\u2019s been quite exciting because this company is going to play a pivotal role in terms of enabling business to do business, and actually also enabling economic growth. So I\u2019m actually quite delighted to be at the helm of such an important company in South Africa.<\/font><\/p>\n

ANA MONTEIRO: And Papi, the fixed-line business delivered a 4.1% increase in revenue, and you could consider that obviously very impressive in light of the pressures from mobile companies, competition and regulatory changes. But you did this by cutting the staff complements quite heavily, about 12% down. It couldn\u2019t have been an easy process. And also you\u2019ve seen growth in the take-up of Internet and broadband in particular. If I want ADSL in my home, there can be a backlog of up to a few months before I get the service. So I must ask, by cutting staff are you not potentially dealing customer service a blow, and how are you getting around those delays?<\/font><\/p>\n

PAPI MOLETSANE: Ana, we\u2019ve actually gone back and looked at the ADSL information process, the ordering process, and we\u2019ve realised that there are some impediments in terms of the way we do things. This is basically looking at the process, and finding ways of improving the process, that actually comes from my own manufacturing environment. There are things that we are doing right now. We have actually embarked on an ADSL pilot project in the Pretoria area, and it has indicated to us that we can actually cut down this long lead time to about two weeks, and I suppose that as time goes on continuously improve on that speed time. But it\u2019s also issues of the way we do things. We can improve on the way we do things. But there are also other endeavours, Ana, in terms of looking at self-installation \u2013 that we will get people to install their own ADSL through simple instructions. And we will perhaps, looking forward, look at opportunities to get other resources to help us activate the broadband or ADSL connections.<\/font><\/p>\n

ANA MONTEIRO: Papi, you\u2019ve previously told the market that Telkom expects to lose between 10 and 15% market share when the SNO eventually commences its services. What exactly is Telkom doing besides upgrading its networks? You\u2019ve told us about theR30bn capex project over the next five years. So, besides upgrading its networks and focusing on customer service, what is Telkom doing that will prevent this loss of market share when the SNO opens its doors for business?<\/font><\/p>\n

PAPI MOLETSANE: Well, I think when you look at the fixed-line business, Ana, we have the dominant market share. So whoever comes in, in spite of what we do, we are going to lose a level of market share on that perspective. So we\u2019ve incorporated that inevitability in our plans, moving forward. What are we doing? We are trying to delight our customers, we are trying to make sure that we offer them an impeccable value proposition, we are trying to make sure that the services and products that we are offering them are indeed competitive. We try to make sure that it becomes difficult for our customers to leave us and to move to the second network operator or to any other competitor. So we focus more on our customers and our [indistinct] the preference of competition in the form of SNOs. I will not disregard them. But it\u2019s more important for us to look at what do we do to delight our customers.<\/font><\/p>\n

ANA MONTEIRO: And Papi, Telkom is the joint parent of SA\u2019s biggest mobile operator, that\u2019s Vodacom, and a lot of people are wondering how the company is going to manage to sustain the stellar growth that it\u2019s delivered so far. And this is in light of the shareholders\u2019 agreement in place between Telkom and Vodafone, which prohibits Vodacom from pursuing opportunities north of the equator. What\u2019s Telkom doing to address this?<\/font><\/p>\n

PAPI MOLETSANE: Well, we are constantly looking at these issues. Both ourselves and Vodafone are totally aware that we have to do something to improve, or we have to change the shareholders\u2019 agreement to help Vodacom exploit the opportunities that might be remaining in the African competitive landscape. We are constantly talking to Vodacom and saying to them, please bring these opportunities forward, let the shareholders\u2019 agreement not deter you. But we are engaging with Vodafone right now to ensure that we eliminate this kind of
\nobstacle once and for all to create value. I think it\u2019s sensible to create value for both of us in Vodacom. So we are talking to them, and we hope that this issue will be resolved as soon as possible.<\/font><\/p>\n

MONEYWEB: Thanks Papi, for joining our show.<\/font><\/p>\n

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