Reflecting on the six months to September, acting Telkom CEO Jeffery Hedberg has acknowledged the company's poor performance is indicative of an organisation under pressure.
Telkom today unveiled its interim results, with revenue down 5.4%, to R17.6 billion, EBITDA down 0.6%, to R5.1 billion, and profit from continuing operations down 9.3%, to R1.4 billion.
Hedberg, who took up his position in July this year, says the South African telecommunications industry is becoming more competitive and the regulatory environment continues to pose challenges to all operators.
“It is imperative that Telkom changes the way it operates in order to defend its revenue and grow into new revenue streams,” he states.
“This is an enormous task given the complexity of Telkom's systems, networks and human resources. In addition, Telkom has had to deal with significant management changes. These dynamics create an excellent opportunity for new management to stabilise the business and then execute on its plan to improve the financial performance of the Telkom Group,” continues Hedberg.
Thus, Hedberg has recommitted to the turnaround strategy, which he outlined shortly after taking up his new role.
Recovery course
Hedberg notes that his strategy to improve leadership and organisation within Telkom remains, as well as his plan to increase EBITDA (earnings before interest, taxes, depreciation and amortisation) and cash flow.
Broadband also remains a key element of Hedberg's strategy. He explains that Telkom will take advantage of the network built for the Soccer World Cup as the company prepares converged and bundled offerings going forward.
Lastly, Hedberg has recommitted to stabilising its ailing Nigerian business Multi-Links. Telkom initially invested in the Nigerian company in 2007, but the unit has been a disappointment since it joined the Telkom stable. So far, Telkom has written down Multi-Links by R5.6 billion, which is a third more than the company paid for the Nigerian operator.
“It is essential to stabilise the business, which we are doing through exiting the CDMA business in Nigeria and focusing iWayAfrica mainly on corporate customers. This allows us to allocate capital to those areas that will drive revenue growth and promote cost efficiencies,” concludes Hedberg.
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Hedberg outlines Telkom turnaround
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