Who will succeed Nxasana?

Speculation is rife around who will succeed Telkom CEO Sizwe Nxasana, whose term of office expires at the end of this year.

There has been speculation that at least two candidates have been shortlisted from within Telkom and that a recruitment agency has been appointed to seek suitable external candidates.

However, Telkom is not prepared to comment on the selection process at this stage.

"The Telkom board is completely responsible for the appointment process," says Lulu Letlape, Telkom`s head of corporate services.

Letlape did, however, confirm that the board would make an announcement in September.

At the time of Nxasana`s resignation, Telkom said he would complete his contract period, which ends on 31 December.

"This will give the new CEO the opportunity to work with Nxasana and for a full hand-over process to take place," Letlape says. She would not be drawn on discussions regarding the qualities that would be critical in a successful candidate.

However, analyst Dobek Pater of Africa Analysis notes that while "the next CEO will not have to know everything and be all things to all people", he or she will face some major challenges.

"He (or she) must be someone who has the capacity to provide Telkom with the leadership to weather the challenges that it faces in the short- and medium-term."

These challenges, he points out, include diminishing revenues from voice due to the introduction of voice over Internet Protocol, continued churn from fixed-line to mobile voice call services, and the emergence of additional competition in the form of the second national operator and underserviced area licensees. Telkom also faces increasing competition in the data provision market and the value-added services market.

Pater says the new CEO will have to be prepared to commit further investment into transforming the company into a more flexible organisation, with a number of divisions operating practically as separate entities without cross-subsidisation.

The incumbent should be prepared to and able to learn from operator experiences in the developed markets and understand how new business scenarios may work in SA.

"He should also be prepared to make decisions that may be unpopular with shareholders, government and unions. These may include committing finance to upgrade the network to next-generation, which may mean perceived uncertainty and possible financial loans, and a further slashing of Telkom`s workforce by a few thousand, a move that is unlikely to be popular with unions."

The incumbent must be prepared to suffer criticism due to poorer-than-expected performance, because Telkom`s honeymoon is probably over and now very hard work begins to continue good performance in a competitive environment, Pater says.