Telkom revamps operations
New model splits it into a group of five divisions
STATE-owned telecoms group, Telkom, unveiled a shake up of its business structure in a move aimed at aiding growth amid fierce competition and a depressed economic outlook.
Under the new operating model, Telkom, which has the largest infrastructure network in South Africa, has been divided into a group of five divisions, whose focus areas range from broadband to property management. Telkom chief executive, Sipho Maseko, yesterday said that under the new operating model cost management would be key and the company would find new markets.
Maseko said that the crux of the new operating model was to provide greater business unit accountability for operational delivery and value contribution for the group as a whole, while ensuring strategic control from the corporate centre.
“The fundamental reason for our system improvements is to enable us to be better at what we do to create an improved customer experience. We continue to rationalise our legacy systems to be fit for the purpose, replacing archaic systems with simpler, more efficient systems where possible to enable us to become a more effective Telkom of the future,” Maseko said.
He also said that driving this approach reduced costs and the integration of systems. It also provided the company with a more complete view of the needs of its customers.
“We intend to improve our organisational culture and foster increased initiative and individual accountability. These aspects, coupled with persistent customer focus, our strategy, our new operating model, and synergy improvements in our business units, are expected to yield positive growth, financial prosperity and stakeholder value creation,” said Maseko.
The company has implemented an operating model to manage and allocate resources that include the Gyro division, which will focus on managing property and unlocking value in its property portfolio.
The Connexion (BCX) segment provides converged infrastructure solutions, information and communication services, including cloud infrastructure and hardware and network equipment sales in South Africa and seven African countries, the UK and Dubai.
The Openserve segment is Telkom’s redesigned wholesale and networks division, which provides access services.
The Trudon segment is expected to establish an e-commerce marketplace for the group.
The Consumer segment provides fixed line and data communication services through Telkom South Africa and the mobile business offers mobile voice services.
In 2016 the company consisted of three segments namely BCX, Openserve and Consumer.
The new model signals a new growth phase for Telkom and comes as the South African economy grapples with low growth, high unemployment and low business and consumer confidence.
Sibonginkosi Nyanga, a research equity analyst at Imara SP Reid, said the new operating model would streamline Telkom’s operations. “It makes it easy for the company to grow. They can easily restructure its operations if need be,” said Nyanga.
A Telkom shop at a mall in Johannesburg. The company has adopted an entirely new operating model. PHOTO: REUTERS