Frost & Sullivan says Telkom went from “bad to worse” under the leadership of group CEO Reuben September. The analyst firm’s ICT industry analyst, Spiwe Chireka, says a “string of bad decisions contributed to a slide in the company’s performance”.
“It’s no secret that over the past three years, Telkom has gone from bad to worse,” she says, specifically pointing to the performance of Nigeria’s Multi-Links.
Chireka describes Multi-Links as a “complete disaster”.
However, she does feel that September’s legacy will also be felt on two particularly positive fronts.
“Though it has generated a lot of scepticism, Telkom’s move into mobile was a necessary step,” she says. “Instead of just buying an existing operator, it was a brave decision to set up operations from scratch. Frost & Sullivan believes there is potential for success here.”
While there is little chance that Telkom will overtake Vodacom or MTN in this space, it can make “reasonable returns”.
“Telkom has also jumped onto the data centre bandwagon, which is one of the biggest growth areas in SA,” Chireka adds. “That is likely to pay dividends.”
She says Telkom must be “brave” in its appointment of a replacement for September. “The business needs a complete turnaround strategy,” she says. “It needs someone with a lot of experience, who has been through all the various challenges that the telecommunications market presents and can bring best practices to Telkom.”
The new CEO will have to contain costs. “Whoever takes over, needs to trim the operation as quickly as possible,” she says. “It’s not like Telkom is not making money. What it needs to do, is stop spending so much.” — Staff reporter, TechCentral
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