Marc Ashton’s recent column about Telkom’s approach to enterprise and supplier development, concludes with him noting: “So, maybe I am wrong.” As a regular reader and fan of his opinions, in this instance, I have to agree with him — he is wrong.
Telkom has made a significant long-term investment in developing entrepreneurs through its FutureMakers programme, which was launched last month but has already been supporting and creating businesses for a numbers of years. We recognise that many businesses that approach the programme for support will be inexperienced. For precisely this reason, we have several business development support options, including virtual and physical incubation support and ongoing coaching. This will help to create and embed a new culture of entrepreneurism into the economy, while also increasing access to technology.
Within Telkom’s existing employee population, we have many skilled and highly capable people, with industry experience. These people have specialist and high sought-after skills and their capabilities could be deployed far wider than just Telkom’s business.
As an example, skilled technicians may choose to develop businesses installing DStv dishes, putting Wi-Fi solutions into homes, and so on, as well as selling repair services back to Telkom. This industry is booming. Just over 18 months ago, Telkom bid for a community installation of fibre and three companies applied. Recently, Constantia in the Western Cape followed a similar process and 25 companies applied. The competition is fierce and there are real opportunities for people with the right skills and the right support. Our current Telkom people have the skills and FutureMakers knows how to provide the support.
Furthermore, contrary to the writer’s claims, the investment that Telkom is making in the Telkom FutureFund is not tax driven. It does not give rise to any tax credits for the company. A thorough analysis of the Davis Committee report, which Ashton referenced, would have made it clear that there are no tax credits for enterprise development investments.
The report does, among other things, deal with a specific section of the act that allows for tax deductions of investments made into approved venture capital companies. Telkom is not investing into a venture capital company through its fund. The purpose of the investment is to support the objectives of the FutureMakers programme. This investment is being made on a long-term, multi-year basis and is entirely independent from the ongoing proposed restructuring work within Telkom.
As part of this programme, Telkom is also providing an initial capital injection of R100m for businesses requiring debt and equity finance and significant amounts into business development support and incubation hubs. These businesses will also be given the opportunity to work with an established industry player, like Telkom, to grow.
In addition, we are working with value chains to find sustainable business for the new companies. All of this is in line with enterprise development initiatives and is precisely what the writer is claiming other successful companies are doing in this regard.
- Jacqui O’Sullivan is Telkom spokesman
- This first appeared on Moneyweb and is republished here with permission