New Vodacom chief's many challenges

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BR Vodacom 3204 inlsa Vodacom CEO Peter Uys to step by Simphiwe Mbokazi 453

THE incoming chief executive of Vodacom, Shameel Joosub, will face challenges regarding market pressures, regulatory issues and a strategy for the company’s future growth, according to analysts.

Joosub will succeed Pieter Uys, who has resigned and will leave the cellular operator at the end of March next year.

However, Joosub would take over on September 1 to enable a smooth transition, Vodacom said yesterday.

Spiwe Chireka, the International Data Corporation’s programme manager for telecoms in Africa, said a key issue for Joosub should be a strategy to diversify into other African countries to mitigate the risk of slowing growth in South Africa, Vodacom’s key market. He would also need to counter aggressive marketing from Cell C, now headed by Vodacom founder Alan Knott-Craig.

An unresolved shareholder dispute in the Democratic Republic of Congo, which could result in Vodacom exiting that business, and defending its business in the enterprise segment from Telkom, were also concerns. “The enterprise segment is a key market where the largest amount of value is now sitting,” Chireka said.

Chireka said Uys had been lauded for Vodacom’s successful rebranding last year, but his greatest impact was securing a lead position in the local data market ahead of MTN, especially in raising revenue from data.

Khulekani Dlamini, the head of research at Afena Capital, said Vodacom needed a different strategy to keep junior rivals Cell C and 8.ta from luring customers away.

Chris Gilmour, an investment analyst at Absa Investments, said the market was anything but disappointed with the appointment of Joosub. “It is not bad news. I think it will be a seamless transition. I think it’s taken the market a little by surprise.”

He said Joosub was perhaps a little less known but Uys’s departure was “good” as it was becoming a trend for chief executives not to stay too long.

Uys had served Vodacom for nearly 20 years, during which time he was managing director of Vodacom South Africa, and group chief operating officer under founding chief executive Knott-Craig. He has been chief executive since 2008.

He has been credited with helping to stimulate Vodacom’s growth and the rollout of third-generation services.

Vodacom expanded its customer base by 37 percent to 47.8 million subscribers in the year to March.

Maya Makanjee, Vodacom’s chief officer for corporate affairs, confirmed that a restraint of trade agreement would apply to Uys from the end of March next year, but said the terms were confidential.

Brian Neilson, a director at BMI-TechKnowledge, said the cellular market was transitioning into a mature phase.

Vodacom required a manager with a background of leadership in a mature market and an intensive understanding of the local market, the interaction within the industry, policy making and the regulatory environment. The job required someone who was sharp on technical issues and could manage government lobbying.

Nielson said telecoms companies in a mature market were often saddled with cost management challenges.

Joosub would have to monitor marketing costs as local cellphone companies had been outspending each other to advertise promotions.

Joosub joined Vodacom in 1994. He has a Bachelor of Accounting Science (Honours) from Unisa and a Master of Business Administration from the University of Southern Queensland, Australia.

Vodacom fell 0.1 percent to close at R95.90 yesterday.

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