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Update on Telkom CFO's disciplinary hearing


Pretoria, 31 Jul 2014

Telkom today announced the disciplinary hearing involving suspended Chief Financial Officer, Jacques Schindeh"utte, on a matter of personal misconduct, is scheduled to resume on 6 August 2014. This follows a long adjournment agreed to by both parties.

In the interest of ensuring a fair process, all parties to the confidential disciplinary hearing are constrained from discussing the matter outside the hearing itself or commenting on its content to third parties. This applies to responding to queries relating to matters that have been raised in, or are part of, the hearing. Telkom respects this process and is therefore not in a position to comment on any details related to the matter until the outcome is decided.

Telkom is committed to following the correct principles and processes to ensure the hearing is conducted in a fair and dignified manner, which meets all legal and governance requirements. The outcome of the hearing will also follow the prescribed board processes, before being communicated publicly. In the interests of transparency Telkom is committed to communicating the outcome once all required legal and governance processes have been followed.

The company hopes a definitive resolution on the matter will be forthcoming on the conclusion of this session.

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Telkom

Telkom SA ("Telkom") is a full-service telecommunications provider for South Africa. The company offers wholesale, business, residential and payphone customers a wide range of voice and data services and products, in support of the company's mission statement - seamlessly connecting people to a better life. As of 31 March 2014, Telkom had approximately 3.6 million telephone access lines in service and 475 144 ports connected via MSAN access.

The company had consolidated operating revenue of R32.5 billion and profit after tax of R1.577 million for the year ended 31 March 2014, excluding the net curtailment gain. Total assets amounted to R39.4 billion and equity attributable to the owners of Telkom to R22.8 billion as of 31 March 2014. The group generated normalised free cash flow of R1.2 billion for the year ended 31 March 2014.

The company offers business, residential and payphone customers a wide range of services and products, including:

* Fixed-line retail voice services using PSTN (Public Switched Telephone Network) lines, including ISDN (Integrated Services Digital Network) lines, and the sale of subscription based value-added voice services and calling plans;

* Fixed-line customer premises equipment rental and sales services both voice and data needs and these include PABX, computers, routers, modems, telephone handsets and other ancillary equipment;

* Interconnection services, including terminating and transiting traffic from South African mobile operators, as well as from international operators and transiting traffic from mobile to international destinations;
* Fixed-line data services, including domestic and international data transmission services, such as point-to-point leased lines, ADSL (Asymmetrical Digital Subscriber Line) services, packet-based services, managed data networking services and internet access and related information technology services;

* Data centre operations includes e-commerce, application service provider, hosting, data storage, e-mail and security services;

* W-CDMA (Wideband Code Division Multiple Access), a 3G next generation network, including fixed voice services, data services and nomadic voice services;

* Mobile communication services, including voice services, data services and handset sales through Telkom's mobile brand, called Telkom Mobile;

* Telkom Mobile is continuously expanding its long-term evolution (LTE) coverage. It is the company's latest generation of mobile network technology that provides superfast mobile wireless broadband with low latency (or buffering) that gives users an unsurpassed experience for their everyday data connectivity needs. It is a step up from 3G, offering up to 90Mbps download speed and up to 25Mbps upload speeds - approximately three to four times faster than current 3G speeds. It is an ideal option for use in areas where there is no ADSL infrastructure; and

* Convergence is one of Telkom's key strategic initiatives in building a sustainable future for the company. It will lead the provision of converged services in South Africa in support of Telkom's mission statement: seamlessly connecting people to a better life.

The Telkom Group consists of Telkom as well as two main subsidiaries, namely Trudon and Swiftnet. Trudon provides several directory service offerings off both physical and electronic platforms and Swiftnet provides a suite of services including traditional connectivity services for point-of sale, managed SIM services and customised wireless and wired virtual private network services.

Telkom is listed on the Johannesburg Stock Exchange (JSE) and has a market capitalisation of approximately R17.5 billion (as at 31 March 2014).

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