Fixed-line operator Telkom has been accused of merely masquerading as a commercial enterprise, while in reality operating like a parastatal, say industry analysts.
Analysts believe government interference is behind the latest exodus of senior staff.
The announcement this week that CFO Peter Nelson had resigned from the ailing company sent its shares down more than 3%, as the market digested news of yet more senior talent jumping ship. Nelson could not be reached to comment on his resignation.
The CFO's resignation, for which no explanation was offered by Telkom, comes shortly after the company announced CEO Reuben September would leave with immediate effect.
Last month, when Telkom announced September would retire from the company, it said he would stay on until November. It is unclear what brought on the change in plans, but Telkom hastily installed Jeffrey Hedberg to lead the company in an acting capacity for the time being.
Strings attached
With no clear explanation for the resignations and reshuffle, industry experts have concluded that government interference is to blame for the instability in Telkom.
Among those who opted for the package are chief of strategy Naas Fourie, MD of Telkom International Thami Msimango, head of procurement Stafford Augustine and group executive for network provisioning Marius Mostert.
But Telkom insists the whittling down of its management team is merely a cost-cutting exercise and will not result in a skills dearth.
However, analysts argue that government interference is the root cause for the mass exodus.
“Essentially, the cracks are beginning to show and we have always maintained that government should not have a role in the telecommunications industry. Now their interference at the highest level has highlighted how non-productive it can be,” argues WWW Strategy MD Steven Ambrose.
Government holds 39.8% of Telkom, which entitles the Department of Communications to appoint the company's chairman.
To this end, in September last year, Jeff Molobela was appointed Telkom chairman and non-executive director on the Telkom board. Resignations followed soon after.
Political minefield
“Often when there is new management, there is a 'clean up' of the old structure. This seems to be happening at Telkom. This will only settle when we have a confirmed CEO appointed, who in turn can pick his team,” offers BMI-TechKnowledge MD Denis Smit.
Smit is not certain as to whether the “clean-up” has been the sole responsibility of Molobela. However, Ambrose believes Nelson's resignation, like September's, is due to conflict with the political element in Telkom.
“Nelson joined Telkom after being the CFO of Netcare, a highly-efficient business unit, to walk into a political minefield in Telkom. Instead of running a business, Nelson found he had to run a political campaign,” maintains Ambrose.
The consequence of this situation is that Telkom will find it infinitely more difficult to attract the relevant calibre of talent to run such a critical organisation, predicts Ambrose.
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