Suddenly it’s about sharing and caring
Telkom should not be the whipping boy of the telecoms industry, says CEO
TELKOM CEO Sipho Maseko is “pleasantly surprised” by the performance of its share price — “but we will take it”.
He’s not the only one to be surprised, given the poor numbers released by Telkom this week.
The share price suggests a far healthier revenue performance than is the case or is likely to be the case in the foreseeable future. Is he afraid it’s a bubble that will pop when reality hits home?
Maseko, 46, says Telkom has not been hiding any bad news from shareholders.
“We’ve been very clear, we’ve spoken very transparently. In the near term the real game we’ll be playing is a cost game. We have to bring costs under control. On the revenue side, the most important thing is to arrest the decline.”
This they hope to do by replacing declining voice revenue with data and other services. They’ve begun pumping money into the fixed-line network. “Fixed is the future around content delivery,” he says.
Haven’t they woken up to this very late in the day?
“We’ve lost a bit of time,” he concedes. “We’re working at the speed of light to catch up.” They’re focusing investment on the access network from the exchange to businesses and homes to improve it and provide better broadband, he says.
But from being in pole position they’re now having to play catch-up.
“Catch up to who? South Africa has 185 000km of fibre. We own 147 000 of that. The issue for us is that we are modernising the access network.”
He won’t admit they’ve allowed Vodacom to steal a march.
“On the mobile side they’re dominant, but on the fixed side we’re still leading.” For now, perhaps. Vodacom has announced a huge investment in fibre broadband to homes and businesses. “We welcome the competition,” he says. Really? “Yes. In the past we’d wallow in our tears, roll over and die. But now what we’re beginning to see is that as a company we’re responding when there is a challenge to a position we were holding before.”
There’s been change, he says.
“We have to compete, things won’t just happen for us.”
There’s also “a lot more sharing we could be doing as net-
a
mindset
Telkom has moved so close to the brink of collapse that it has traumatised all of us
work providers”.
A year ago he was arguing very forcefully against sharing Telkom’s “last mile” network. Has his tune changed?
“I wouldn’t say my tune has changed. What we’ve been saying is that we’re investing in the network. What we were dealing with at the time was a naughty notion that Telkom has not been making any investment.
“What we were saying is, let’s talk about all last miles, not just the Telkom last mile. So Telkom can’t be reduced to being the whipping boy.”
The bottom line is that Telkom had a monopoly on infrastructure that properly belonged to the country and which it refused to share. Now Vodacom is investing in its own fibre network and Maseko accuses it of duplicating infrastructure. Isn’t that a bit rich?
“It’s not an accusation, it’s a statement of fact. We have indicated that the fibre investment we’re making to the home is open access, it is not solely for the use of Telkom retail. If you are a service provider you’ll have access to that.”
Now that they’re staring into an abyss of their own making it’s suddenly about sharing and caring?
“It is part of the shift that we are creating in terms of how we interact with our peers and with the overall South African economy,” he says. “It is a shift from our side.” Why? “To encourage competition. If they [Vodacom] want to duplicate infrastructure, good luck to them.”
But instead of controlling Vodacom, when it had the chance, Telkom is now in a race to the death with it. Does his team have the skill to win?
“We have people now who really want to win. Telkom has
We’ve lost a bit of time. We’re working at the speed of light to catch up
moved so close to the brink of collapse that it has traumatised all of us.
“It has been a wake-up call for everyone who has an interest in Telkom, whether you’re a shareholder, an employee or in management.”
One of those who apparently doubted whether Telkom had the expertise was former chief financial officer, Jacques Schin- dehütte, who was dumped.
Maseko denies this but won’t say why he was suspended and then, in effect, paid to go away.
“It is a matter between him and ourselves.”
Maseko was ordered to undergo corporate governance training over a large interestfree loan that was made to Schindehütte, apparently without board approval.
Maseko denies there was no board approval. Why the loan? “I want management to be personally committed to the turnaround. So we encourage them to buy stock.”
He says he did not doubt Schindehütte’s commitment to the turnaround.
What did his obligatory day with a top accounting firm teach him? “That even in the smallest matter with your closest executive, always ensure that process is complied with.”
And that you use your own number plates?
Maseko says the number plate cloning allegations against him are rubbish.
As for using his political connections to get the authorities off his back, “I don’t deal with people in Luthuli House”, he says. “I don’t work that way.” Comment on this: write to letters@businesstimes.co.za or SMS us at 33971 www.timeslive.co.za