State-owned broadcasting signal distributor Sentech is in “urgent need of a turnaround strategy” and requires “drastic and immediate action” if it is to “avoid lapsing into terminal decline”.
That’s the key finding of a task team, appointed last year by communications minister Siphiwe Nyanda, that has been investigating problems at the Sentech and the SABC.
“Sentech’s deterioration into its current loss-making situation began with the awarding of telecommunications licences and the organisation’s attempt to launch its telecoms services without adequate funding, robust business plans and well thought-out strategies,” says Nyanda, who was providing details of the task team’s findings at a press conference in Pretoria on Thursday afternoon.
However, Nyanda says no decisions have been made about what course of action will be followed. Contrary to a report published in Business Report newspaper on Monday, Nyanda says no decision has been made to remove any members of the Sentech board. The newspaper had suggested that the job of Sentech CEO Sebiletso Mokone-Matabane was on the line.
“I don’t think there is an explicit recommendation for the dismissal of anybody,” Nyanda says. “There is strong commentary [in the task team’s report] on leadership and a need to effect changes in leadership. These are recommendations only.”
According to Nyanda, the task team has proposed four possible solutions to Sentech’s problems:
- Reposition the company in terms of its core competence as a broadcasting signal distributor;
- The company could leverage its signal distribution business to look for opportunities elsewhere on the continent;
- It could continue with its diversification strategy of growing the telecoms business — a move that would require it to leverage strategic partnerships with “seasoned” industry players. “It would need to revisit and rejuvenate its reputation to attract potential suitors;
- Lastly, the company could transfer its telecoms licences to Sentech affiliate Infosat.
Among other things, the team has recommended that Sentech should:
- Discontinue all loss-making products and ventures;
- Ensure it has sufficient funding for the country’s migration to digital terrestrial broadcasting;
- Strengthen its leadership and governance;
- Exploit its unused or underutilised licences through private-public partnerships;
- Exploit the potential in other African markets;
- Receive clarity regarding future funding;
- Lobby government to develop legislation to guarantee its position as the preferred supplier of broadcast signal distribution to the SABC.
Nyanda says before he makes any decisions about Sentech’s future, he will engage the company’s board. “I am in touch with Sentech from time to time, with both the board and the CEO, but we have not engaged with respect to this report,” he says.
“Having received [the report], I have an obligation to engage with the board to see where we go with respect to all the issues that have been raised here. — Duncan McLeod, TechCentral