Telkom set for major shake-up
Unlocking value for shareholders
TELKOM will soon have a new name. CEO Sipho Maseko is leading a major restructuring at the partly stateowned company that will make it a retail telecommunications brand under a new, Remgro-style corporate centre.
Under that corporate centre – which will have a new name that is still to be determined – will be at least five subsidiary businesses.
It’s part of an ambitious plan by Maseko to unlock further shareholder value at the telecoms group, whose share price has climbed more than fivefold on his watch.
He took the reins on April 1 2013 under a reconstituted board, led by chairman Jabu Mabuza.
The restructuring represents a significant expansion of Telkom’s strategy two years ago to spin off its wholesale business into a new company, Openserve – modelled loosely on BT Group’s Openreach.
Maseko this week unveiled plans to group Telkom’s vast property and telecoms tower assets into a new property management business called Gyro.
The new holding company would be something like Remgro, which has investments in a range of industries, Maseko said. It would be a “strategic shareholder”, with each subsidiary free to “pursue its growth agenda as independently as possible”.
Maseko said operators in New Zealand, the US and elsewhere had embarked on the route Telkom was now pursuing, so there were examples that it could draw on.
“We took a counterintuitive approach,” Maseko said in an interview this week.
“Normally, the view is that the sum is better than the parts, but we have taken the view that the parts are better than the sum. There was a lot of value leaked in the aggregation approach we had taken previously.”
By the end of Telkom’s financial year to March 31 2018, Maseko expects the group to be made up of five businesses: retail telecoms entity Telkom, IT services business BCX (formed through the merger of Business Connexion and Telkom Business), wholesale arm Openserve, e-commerce and online business Trudon and the property management company Gyro. — TMG