Oger holds onto Hedberg

By Candice Jones, ITWeb online telecoms editor

Johannesburg, 24 Aug 2009

Saudi Oger has confirmed it is holding former Cell C CEO Jeffery Hedberg to an employment agreement, keeping him from taking up his position at Telkom.

In a statement released by Cell C's majority owner, Oger Telecom, this morning, the company explained it still considers Hedberg a full time employee and is holding him to the agreement.

“Thus, Mr Hedberg may not, by reason of his employment with Oger Telecom, carry on or be engaged in any other business trade or occupation,” the company's statement goes on to say.

Hedberg resigned from Cell C in March, in a move that surprised industry watchers. His contract is set to expire in November, and many analysts expected him to see out his term of employment.

Since he took over at Cell C in May 2006, Hedberg has been instrumental in the turnaround of SA's third mobile operator. He inherited an almost impossible task, given the company's large-scale debt, which includes billions in foreign currency financing and interest.

Cell C produced its first and sustained profit under his guidance. It has also made strides in growing its market share through aggressive campaigns on price.

In July, Telkom announced it had appointed Hedberg to take up the helm of its Nigerian operation, Multi-Links.

Multi-Links is in dire straits following an operator battle in the country that left the CDMA market in a shambles. Hedberg is considered to be the ideal candidate to revitalise the company.

Telkom has a lot riding on fixing up the Nigerian business, since it is expected to fill some of the revenue gap left by the sale of Vodacom to Vodafone earlier this year.

When speculation arose last week that Oger was holding onto Hedberg, neither Telkom nor Hedberg were eager to expand on the details of the situation, considering the sensitivity of the matter. Telkom would only say Hedberg has been hired for a position in Nigeria “and the date of commencement is currently being discussed with him”.

Hedberg confirmed the negotiations were complicated; however, he said he was looking forward to working on fixing Multi-Links.

Oger's statement this morning says Hedberg has been compensated under the terms of his contract and will be held to it. It also says Telkom is “fully aware of the situation”.

Should Hedberg get to head up the Nigerian operations, he will have his work cut out for him over the coming two years. Telkom has ambitious targets for Multi-Links, including an EBITDA-positive report by 2010/11, and wants the company to be cash flow positive by 2011/12.