Over the last 12 month South Africa has seen the resignation of many high profile telecommunication executives. Recent departures include Vodacom CEO Alan Knott-Craig, Cell C CEO Jeffrey Hedberg and Virgin Mobile CEO Peter Boyd. iBurst Managing Director Alan Knott-Craig Jnr has also announced that he will be leaving the wireless broadband operator shortly.<\/p>\n
These resignations may be a sign of more challenging market conditions and increased pressure on executives to maintain or grow profits in an increasingly competitive environment. One industry expert, who asked to remain anonymous, even suggested that some of the CEO resignations may have been timed to ensure that they don’t have to face the challenges of lower margins and tougher market conditions.<\/p>\n
According to Arthur Goldstuck, MD of ICT research firm World Wide Worx, the changing operational climate in the cellular and telecoms market weighs heavily on both management and stakeholders.<\/p>\n
“We suggested a couple of years ago that the mobile industry was headed for a wall, which one could see from the meeting of two clear trajectories: rising market saturation, and falling ARPUs. Of course the two are closely intertwined, but they spell the end of easy profits and the beginning of real competition for the soul of the customer. This heralds a business focus on customer retention rather than acquisition, which in turn requires a very different management style, strategic orientation and operational priority,” said Goldstuck.<\/p>\n
“While much of the management change we see is circumstantial, there is no doubt that the changing operational climate weighs heavily on both management and stakeholders. That, in turn, places both pressure for change on management and demand for change from stakeholders. Something has to give when you have those stresses in large corporations, and we are beginning to see the fall-out now.”<\/p>\n
BMI-TechKnowledge Director Brian Neilson said that while the telecommunications market is getting tougher, it may not be accurate to generalise on the reasons for the spate of high profile resignations in the telecoms space. “Each case is likely to have its own unique set of reasons, but pressure from principals or shareholders is likely to play a role in at least some of the cases,” said Neilson.<\/p>\n