Cape Town, 02 Apr 2007
Department of Communications director-general Lyndall Shope-Mafole has denied wanting to have Telkom CEO Papi Molotsane fired. However, she wants the partially state-owned telecommunications group to operate within policy frameworks.
Sources close to the Department of Communications and Telkom say Shope-Mafole was incensed by Telkom's signing of the supplier agreement for the Nepad Broadband Infrastructure Network (the Eassy project), because it also gives credibility to the rival Kenyan position.
Last week, Shope-Mafole stated government would use its board influence to stop Telkom from going ahead with the contract.
"I don't want Papi [Molotsane] fired. We will engage with Telkom to resolve the situation," she says.
However, a communications department source says even if Molotsane's position is safe for the time being, he will have to ensure he toes the line in the future.
"Governments do not forgive snubs, perceived or otherwise," the source says.
Same right of access
Last week, Shope-Mafole told Parliament Telkom, along with Neotel, Vodacom, MTN and Cell C, had signed the supplier contract with Alcatel Lucent on 9 March, but it was outside the policy framework as set by the South African government, along with the African Union.
In terms of the policy framework, all users of the cable would have the same rights of access, whether they had invested in the $300 million cable or not. This is being done to avoid another situation such as the SAT-3 west coast cable that has been controlled by a closed consortium, leading to the perception of high telecommunications prices for SA and its neighbours.
The second part of the Nepad Broadband Infrastructure Network project is to lay a series of fibre optic cables through the landlocked countries. Twelve out of the original 23 countries have signed the overall project protocol and only one, Rwanda, has had it ratified by Parliament.
Kenya withdrew from the project, because it perceives the cable should be run on commercial lines - a similar view to Telkom's Molotsane. Now that Telkom has signed the supplier contract, the department's view is that it has sided with Kenya and, therefore, negates its own diplomatic and developmental strategy with regard to the whole project.
Shope-Mafole says companies must operate within the policy framework that enshrines the view of "non-discriminatory access".
Lack of vision
Johannesburg Stock Exchange analysts say the market has mixed views of Molotsane's leadership since he took the reins 18 months ago.
Well-known JSE commentator David Shapiro says, while Telkom has delivered strong results in previous years, there seems to be a lack of vision from the group.
"MTN, on the other hand, seems to be far more innovative," he says.
Another JSE analyst, who wants to remain anonymous, says the market's view of Molotsane is that he is inexperienced and lacks vision.
"If he left Telkom through normal shareholder action, it would not affect the market too much. However, if government pushed for it, then the market could take a very dim view," he says.
Molotsane declined to comment on this issue. Telkom would not comment as the company has entered a closed period ahead of the publication of its year-end results later this month. Telkom's share price was most recently at R165, down 100c in quiet trade.
Related story:
Govt to strong-arm Telkom
Share