Hedberg hired to fix Multi-Links

By Staff Writer for Telkom

Johannesburg, 08 Jul 2009

Telkom has appointed former Cell C CEO Jeffery Hedberg to head up its troubled Nigerian business, Multi-Links.

Hedberg's appointment follows speculation that surrounded his resignation from Cell C that Telkom was looking to snap him up. He resigned from Cell C, with immediate effect, at the end of March. At the time, Hedberg vehemently denied being approached by Telkom.

Telkom hopes Hedberg will perform similar miracles on Multi-Links as he has with other troubled businesses during his leadership career. “We are elated to bring Hedberg on board, especially considering his distinguished record for turning around companies,” says Telkom CEO Reuben September.

Hedberg was instrumental in the turnaround of SA's third mobile operator. He inherited the almost impossible task of turning a profit in the mobile business, despite the vast amount of debt with which it is saddled.

Multi-Links is in similar dire straights, knocking Telkom's latest annual results set with a R1.7 billion net loss. It is the third report in which Multi-Links has produced a net loss for Telkom, and investors and analysts have been sceptical about the company's potential.

Telkom has a lot riding on a successful operation in Nigeria, since the company has pitted Multi-Links as one of its financial fillers for the loss of Vodacom revenue. “Turning around Multi-Links' performance is vital to Telkom given the extent of the group's investment and the enormous opportunity the Nigerian market provides,” says September.

Hedberg will have his work cut out for him over the coming two years, considering Telkom's ambitious targets for Multi-Links. “We expect Multi-Links to be EBITDA positive by 2010/11 and become cash flow positive by 2011/12,” notes September.

Telkom says it will now turn its full attention to making the Nigerian business produce profits.

Hedberg will report to Telkom International MD Thami Msimango, who has moved to Nigeria to monitor Multi-Links' progress.

Telkom could not indicate when Hedberg will take up his tenure, or whether he will be based locally or in Nigeria.