Telkom re­vamps op­er­a­tions

New model splits it into a group of five di­vi­sions

The Star Early Edition - - BUSINESS REPORT - Di­neo Faku

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

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