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Telkom’s new CEO Serame Taukobong in a bid to ‘stabilize’ cooling mobile business

TELKOM head offices in Pretoria. Picture, Xolani sibanda.

TELKOM head offices in Pretoria. Picture, Xolani sibanda.

Published Jun 15, 2022

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Telkom, South Africa’s mobile’s business biggest communication services provider is showing signs of cooling and the company’s new CEO Serame Taukobong plans to “stabilize” the business.

Telkom’s share price on tuesday lost 9.5% following the company’s more downbeat revenue and earnings forecasts which are the result of a slowdown in growth in its mobile business and the continuous decline of its fixed-line business.

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Telkom has grown to become the country’s third-biggest network operator upon its entrance in the mobile space in 2010 with a database of almost 17 million active mobile clients.

Of late, the company witnessed an increase in mobile revenue due to the the lockdown period which supported the boosting in connectivity engineered by the increase and need to work from home.

During the Covid-19 Pandemic, Telkom experienced a growth in mobile service revenue by 40% in the nine months to the end of December which continued until the year to end- March when its mobile business revenue growth cooled to only 6%.

The New CEO Serame Taukobong in January said while this had not set off alarm bells, the company needs to improve the performance of the segment.

He went further to state that “Stabilizing the performance of our mobile business and rapidly expanding our fiber business to make sure that we remain at the forefront is one of our focus areas for the medium term”.

“Our focus is mainly on retention, to ensure that we retain our customers as much as we can and add more value services. We can extract more value out of the existing mobile subscribers, that is where growth is going to come from,” he said.

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“The past six months at the helm of the company have been a “baptism of fire”, Taukobong says

He landed at a time when the company was mounting a fierce legal challenge against the auction of spectrum by Icasa, a process that threatened to derail the long-awaited process. However, the parties later found a common ground and withdrew the lawsuit.

In January, President Cyril Ramaphosa ordered the special investigating unitto probe some of the investments undertaken by Telkom in parts of the continent over 13 years ago, to establish whether there was any unlawful expenditure of public money in the deals and whether the losses suffered by Telkom or the state may be recovered. Government owns almost 41% of Telkom.

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“It has been extremely interesting. I started on January 1, and on January 4 I was in court with Icasa, a few weeks later there was the SIU matter,” said Taukobong.

“It has been a baptism of fire, but it’s something that I am up to,” he said.

On Tuesday, he had to table a set of annual results that showed lower revenue, along with more moderate earnings and revenue forecasts.

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Taukobong says the other area of attention is Telkom’s programme to unlock value of its assets.

This includes the unbundling of Swiftnet, the company which manages its masts and towers portfolio and finding a strategic partner for the IT business, BCX.

Telkom had initially planned to separately list Swiftnet by the end of June, but the plan was later put on hold. Taukobong said the delay in the separate listing of Swiftnet was due to volatile capital markets, and to protect shareholder value and that they are looking at the other potential routes.

“This gives us courage that the market still has some appetite for these towers.” he said in an explanation where he confirmed that the company has been speaking with strategic tower companies that has expressed interest in the business.

The post Telkom’s new CEO Serame Taukobong in a bid to ‘stabilize’ cooling mobile business appeared first on Radarr Africa.

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