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Who's in line for top Telkom job?


Johannesburg, 14 Jan 2011

Following the surprise resignation of Telkom acting CEO Jeffrey Hedberg, the fixed-line operator is coming under increased pressure to install a permanent successor in the position that analysts describe as a “permanently poisoned chalice”.

Industry analysts argue that leadership positions at Telkom have become tainted, with recent controversy following the unplanned resignation of CEO Reuben September and, shortly after, CFO Peter Nelson, in the middle of last year.

Absa investment analyst Chris Gilmour says potential candidates would have to have an extremely strong personality to deal with what has become a “tremendously toxic situation” at Telkom.

Despite the challenges, Ovum senior analyst Richard Hurst says it is imperative a permanent CEO be installed as a matter of urgency. He urges that the Telkom board choose a candidate and a strategy to save the company and stick with it.

Hurst explains that continuous uncertainty surrounding leadership at the company will result in further haemorrhaging of cash at the ailing operator.

Frost & Sullivan analyst Spiwe Chireka agrees, and explains that a permanent CEO will definitely boost investor confidence in the company.

It is widely speculated that government will appoint a CEO of its choosing before it loses the right to do so when its special Class A share in Telkom expires in March. However, it is not yet known who is on government's shortlist.

Nonetheless, analysts speculate on who would be best to turn Telkom around.

Likely candidates

Telkom SA MD Pinky Moholi is the firm favourite among all three analysts.

Chireka explains that Moholi's experience in turning around Nedbank will be highly sought now that Hedberg has announced his departure. She explains that relative to all other candidates, Moholi's experience within Telkom is of great value.

Hurst concurs, adding that Moholi is the best person for the job as she has the necessary political credentials and she is aware of both Telkom's pains and opportunities. He adds that Moholi has been particularly hands-on in the roll out of Telkom's Mobile arm, 8ta.

Chireka also identified another possible candidate: Telkom VP of corporate development Mzamo Mlengana, who she says has the necessary visionary skills required to take Telkom forward.

She explains that Mlengana was instrumental in the acquisition of Multi-Links, but had the vision at the time not to invest heavily into the CDMA business - insight which the company only realised after millions of rands had been lost.

Nonetheless, Chireka says Mlengana would likely focus on African expansion in the role of CEO, which she believes is an important strategy for Telkom.

However, Hurst says that if government looks outside of Telkom, it would likely seek someone with both the necessary political credentials, as well as telecommunication experience. He suggests Karl Socikwa, former Transtel CEO.

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