Telecom turmoil
Burning tyres, sudden CEO resignations, court interdicts, union clashes — it’s just another month in the telecom industry
Imagine you’re the CEO of a company with 28m customers, overseeing revenue of R38,9bn (to December 31), and you have what seems to be a minor dispute with a small portion of your staff.
The dispute turns ugly and angry employees burn tyres outside your corporate head office, overlooking a busy highway. How would you respond?
In the case of MTN, which was until recently led by Ahmad Farroukh, these striking workers represented just 17% of the 4 500 permanent MTN SA employees. Their dispute over working conditions, pay rises and permanent status did not warrant the kind of aggressive, combustible strategy that the strikers went with.
Their behaviour outside MTN’s head office was orchestrated by the Communication Workers Union, which represents just 17% of MTN’s staff.
But in this post-Marikana world, unions now feel emboldened to put on disproportionately violent protests, with scant regard for the consequences.
There’s a profound and painful irony in the union’s demand for what amounts to more professional treatment for its members being made with tyre-burning and sometimes intimidation of other staff.
One can hardly blame Farroukh for leaving, as he did suddenly this month after just 11 months at the helm, opening the door for the highly respected Mteto Nyati to take over.
Nyati, formerly MD of Microsoft SA before joining MTN as group chief enterprise office in October, swiftly resolved the two-month strike and now has a formidable job ahead of him, steering MTN out of the troubled waters it has been in.
But, disturbingly, he is the second telecoms CEO in recent times to have had to make important business decisions that were effectively dictated by the unions.
Over at Telkom, CEO Sipho Maseko climbed down from planned restructuring to turn Telkom around because the labour court agreed with three unions that Telkom should find alternatives to retrenching 42% of its staff (7 800 people).
I’ve had my concerns about Telkom’s executives over their decisions in the past.
But I am sure Brian Armstrong, Telkom’s chief operating