Telkom CEO Reuben September is on a mission to turn the cash-flush parastatal into Africa\u2019s leading ICT service provider.<\/p>\n
In an interview with Business Times, September talked about his five-year vision, responded to criticism of his leadership style and allegations of tender irregularities, and said the company would return to its \u201ccore business\u201d after ditching Telkom Media.<\/p>\n
September, 51, added that revitalisation plans would see Telkom\u2019s revenue and margins coming \u201cunder pressure\u201d in the short term.<\/p>\n
\u201cAs previously indicated, transformation plans would ensure that, in the long term, the company has as many new streams of profitable revenue as possible.\u201d<\/p>\n
He said the next two years would be \u201call about delivery\u201d to customers, stakeholders and shareholders, but he could not discuss specifics as the company is in a closed period ahead of its results.<\/p>\n
He said the potential for growth, in Africa in particular, was huge as Telkom would no longer be hindered by its shareholder agreement with Vodacom. Telkom owns 50% of the cellular giant, but recently agreed to sell 15% for about R22.5-billion and unbundle the remaining 35% to its shareholders.<\/p>\n
\u201cThe negotiations and subsequent deal with Vodacom will set us free on a strategic and operational level and is central to our transformation process,\u201d September said.<\/p>\n
To this end, September said, at least half of the expected R22.5-billion \u2014 after paying taxes and net attributable debt \u2014 would be ploughed into the company\u2019s \u201cdefend-and-grow strategy\u201d. The remainder would go towards paying dividends.<\/p>\n
September said Telkom shareholders could expect \u201ca further opportunity to participate in a growing market\u201d when Vodacom lists on May 18.<\/p>\n
September said Telkom planned to invest primarily in its fixed-mobile strategy, data services and geographical expansion. It presently operates in 35 African countries.<\/p>\n
\u201cWe have a significant presence in Africa already through MWeb Africa, Africa Online and Multi-Links,\u201d September said. \u201cIn some areas we own infrastructure while in others we provide customer services by using the capacity of other operators. So we have a good launching pad to expand.\u201d<\/p>\n
Telkom\u2019s biggest threat is MTN, which has a huge presence in Africa and the Middle East.<\/p>\n
\u201cWe want to be the preferred ICT service provider in Africa and we have a three-to five-year objective to achieve this,\u201d September said, and pointed to the recent memorandum signed with US telecommunications giant AT&T.<\/p>\n
While he refused to comment on the financial benefits, it is understood that the parastatal hopes to earn additional revenues of between 30-million and 40-million a year initially.<\/p>\n
\u201cAs part of this deal we will be utilising each other\u2019s strengths in markets we are involved in via our international networks and services,\u201d September said.<\/p>\n
Moving to the welter of allegations of tender irregularities at the company, September said these had caused \u201creputational damage which we are in the process of setting right\u201d.<\/p>\n
He added, though, that there was nothing untoward in the company\u2019s tender and procurement procedures, and that they were constantly under review.<\/p>\n
\u201cTelkom has a huge amount of procurement activities … many of which are complex and I can never say that something might not go wrong.\u201d<\/p>\n
This week, Telkom scored a major victory after being given permission by the Johannesburg High Court to award a controversial R2-billion tender to Ericsson.<\/p>\n
The deal had been halted by a losing bidder which claimed, among other things, that September enjoyed a close relationship with executives at Ericson.<\/p>\n
Said September: \u201cThe relationship with all stakeholders … is an important aspect of our business. My relationship with them (Ericsson) is of a strategic nature and I will continue to maintain them. I also expect this of Telkom managers and other staff.\u201d<\/p>\n
He added that there were always \u201closers\u201d in tenders. \u201cTherefore we have feedback meetings with unsuccessful bidders as part of our processes. \u201d<\/p>\n
September said he had brought auditing firm KPMG to review \u201cpossible procurement gaps and (to ensure) the maintenance of (corporate) governance standards\u201d.<\/p>\n
With regards to Telkom Media, September said the company had decided to \u201creduce significantly or terminate\u201d its involvement in the ambitious project.<\/p>\n
\u201cWe are in the content delivery business, not necessarily in the content development business … and we simply needed, at this time, to adjust our plans in terms of our core business.\u201d<\/p>\n
September said that an international buyer had been found, but that the deal had collapsed.<\/p>\n
Commenting on criticism surrounding his turnaround strategy, September insisted that it was \u201cworkable and achievable, is being executed and will take Telkom to new heights\u201d.<\/p>\n
On questions over his leadership capabilities and constant rumours that two former cellular executives are openly touting for his job, September said: \u201cThere will always be speculation, but I cannot allow myself to be distracted, given the enormous task at hand.\u201d<\/p>\n