Why Telkom created Openserve - TechCentral

Why Telkom created Openserve

sipho-maseko-180Two years ago, we set out on a journey to transform Telkom, to turn the company around and to place it on a path to long-term growth and sustainability.

Very little about the last two years has been easy.

We have tackled inefficiencies, complexity and high costs, while also reducing our debt, stabilising our mobile business and concluding our long-awaited Business Connexion acquisition.

Our quest to improve customer experience remains a primary focus.

The Telkom team has delivered some remarkable results and we are well on track to stabilise the business. But much remains to be done.

The global and local telecommunications market will continue to evolve. Competition in both the retail and wholesale segments will continue to increase in severity. And customers across all market segments will continue to demand cutting-edge solutions — as they should.

In such an environment, we cannot sit back and let the winds of change wash over us. In our business, inaction spells irrelevance. We have to respond. We have to take responsibility for our future and carve our own path. Instead of being a slave to circumstance, we must be master of our destiny.

It has been two years of tumultuous change. Change brings with it uncertainty and insecurity and our people have had to weather these storms with us as we push forward to build a Telkom that connects all communities.

But this journey is not just about one business. It is not just about Telkom.

As our industry has evolved, so, too, must we.

We must welcome a more open-access environment and all the opportunities it offers.
People speak of broadband as a critical national resource and we agree. We need to democratise broadband.

I personally envisage a South Africa where, like water and electricity, broadband should be within everyone’s reach. It should be open to access.

The vibrant and inclusive information society that is envisaged by the national development plan will remain out of reach, until we collectively bridge our nation’s digital divide.

But to deliver meaningful and impactful change in an open access world, we have had to review our Telkom operating model.

In August, we announced that we would be reorganising our company into core business units of consumer, enterprise, wholesale and networks, supported by a lean and effective corporate centre.

By better organising the business into core business units, we are able to really sharpen our focus on customers.

Without customer satisfaction, growth is quite simply not possible.

Functional separation will help create that environment for growth. It is the right thing to do for our business. And it will also provide us with the scope to turn our broadband intentions and aspirations into our national reality.

Through this separation, and the creation of Openserve, we remove critical stumbling blocks on our path to success.

This separation will drive greater customer centricity and will allow us to focus on our future sources of competitive advantage — by best knowing our customers’ strategies, objectives and aspirations.

Separation frees the organisation to more closely focus on the centre of our business — the customer.

We have to provide our customers with a distinct, truly memorable experience. This is of paramount importance. Our customers deserve the best. It is our job to ensure they get it.

We are transforming the company to become nimble and responsive so that we can meaningfully challenge any competition.

We are building a structure that will allow us to execute this separation and live up to this goal so we can meet customer’s expectations, so we can grow of business and so that we can modernise our economy.

The Openserve logo

The Openserve logo

The launch of Openserve introduces us to a new era for Telkom. We are designing a business that will make this an era of partnership in connectivity and transparent and fair relationships between us and our clients.

Along with focus, we need accountability. Shared accountability is tantamount to no accountability. Whether it is profit and loss, investment decisions or utilisation rates, clear and single-point accountabilities are good for the customer — and good for the business.

Focus and accountability help us remove complexity. Clearer decision making is suddenly possible, which in turn allows us to better leverage our infrastructure investment. All this unlocks shareholder value.

Openserve must be able to compete with its peers. We will deploy networks faster. We will be efficient in how we use capital and we need to serve all Internet service providers in the right way, with the right teams.

As a free-standing division of Telkom, Openserve must develop its own culture and capabilities so that they we can compete and win.

What we will create is effectively an agnostic platform for all.

Openserve must deliver access to broadband and connectivity services to all the service providers.

It must hit its financial targets for the Telkom business but in doing so it will also play a leading role in making broadband in South Africa as pervasive as possible.

There is no doubt that a South Africa that offers broadband access for all is a strong and growing South Africa. As a business, we will benefit from pervasive broadband access as we are the best suited to deliver it.

We have the most pervasive fibre network in the country. We have the broadest network, the most number of masts and towers and we have the fixed and mobile capabilities and capacities to make it happen.

At some point, the digital divide becomes too big. By acting now, we are not only bridging the gap but ensuring millions of South Africans can join us on this journey. Openserve will be at the heart of this access revolution.

With the right products and the right pricing, Openserve will have massive ramifications in the transformation of our economy.

Our actions today will set us on an irreversible path to providing the connected future South Africa deserves.

A Roman philosopher once wrote that if one does not know to which port one is sailing, no port is favourable.

Well, we know which port we have chosen and we know it is the right one. Our task now is the navigate both the calm and stormy seas that await us on this journey, knowing that in doing so, we are making history and shaping the success of our collective futures.

  • Sipho Maseko is group CEO at Telkom


  1. Greg Mahlknecht on

    This article hurt my head. I’m not sure what I just read, or if I did indeed read anything.

  2. For those who found it tl;dr, here’s the Cliffnotes version:
    “We failed, so now we’re restructuring” 😉

  3. perhaps a smidgin of credit for this glorious altruism can be attributed to the competition authorities…

  4. I think you missed the weeping violins in the background.
    Such empathy, such humanity..too bad it’s about thirty years too late!

  5. ThabaYaTshikhuma on

    I find telkom services improving dramatically.I have been watching the developments very closely. You are doing a marvelous job Sipho. And u make me feel proud as well. Big ups!!

  6. I’d give the competition authorities at least 50% of the credit, 25% to the ISPs and telcos that took Telkom to the competition authorities, and the other 25% to Telkom itself. As usual, 0% to ICASA and government. In fact, they should probably get negative scores.

  7. Richard Wickens on

    A summary – “blah blah blah”
    They are splitting off the “Open Network” into Openserve because it won’t make money and they don’t want THAT debt to impact the rest of the company.

  8. I came to read this article hoping to learn something. Instead I remain ignorant and leave with the need for a couple of Myprodol and strong black coffee 🙁

    In short, this was pure click-bait!!!

  9. ok Mr Maseko. Can you stop with the platitudes, we would like to understand how al this insulation from Telkom will work.

  10. Greg Mahlknecht on

    That’s actually a great point, I didn’t think of that… this could be the first step to unloading what’s becoming an albatross around their neck. Government might not let Telkom to be sold, but it might allow them to unload a loss-making division. If this is his long game, then very well played, Mr Maseko.

    I don’t have much respect for him as a telecoms CEO, but I do think he’s very good at reorganization and stuff like that… gutting companies and extracting value at the expense of the employees and customers – I don’t agree with what he is doing and it’s sacrificing the long term prospects for short term gain, but he is good at it.

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