Analysts have praised the appointment of Jeffrey Hedberg as acting group CEO

The surprise resignation of Telkom chief financial officer Peter Nelson could point to deeper problems at the telecommunications group, say analysts.

Birgitta Cederstrom Nicholson, technology research head at Frost & Sullivan, says Nelson’s resignation and the early exit of the company’s CEO, Reuben September, is reason for concern.

“I would like to see a statement from Telkom explaining exactly why they have left. It has not been clear in its statements so far,” she says.

However, Nicholson says the appointment of former Cell C CEO Jeffrey Hedberg as acting CEO was a good move by the board of Telkom.

Kaplan Equity Analysts MD Irnest Kaplan says Telkom needs to explain “what the grand plan for management is”. He says the company has been too vague on the details of the early exit of September and the resignation of Nelson.

“We need to know what the problem is, because if there is a bigger problem, it could happen again,” he says. Telkom should also provide more clarity on succession plans at the group.

“Who knows, maybe it will be a positive change for Telkom and in a few years time we can look back and say it was the best thing for the company,” he says.

BMI-TechKnowledge MD Denis Smit says without clarity on who will lead the business, its share price will remain under pressure. “Telkom is in a bit of a mess.”

Nelson told TechCentral on Tuesday that he had resigned in part because of frustrations with the challenges the group is facing, including problems dealing with the board of directors. “It’s been a really difficult year at Telkom,” he said. “I’ve just got so much energy and I need to move on.”

September and Nelson join a growing list of executives to abandon ship in recent months. Executives who have left include head of strategy Naas Fourie and Telkom International MD Thami Msimango. Both accepted Telkom’s voluntary retrenchment offer for management.

None of the analysts polled by TechCentral will be drawn on what should be done about the problems Telkom is facing, especially concerns over the board of directors. However, Smit says the role of government at Telkom is uncertain and should be resolved. — Candice Jones, TechCentral