Telkom is eating itself

[By Lloyd Gedye]

Last Thursday, 13 January, at 5pm a man was driving near the town of Phokeng, the capital of the Royal Bafokeng Nation, which lies near Rustenberg.

He spotted a Telkom bakkie on the side of the road and a man in a Telkom uniform hacksawing a copper cable.

The concerned citizen was suspicious because the area had been hit by “massive” amounts of cable theft, so he pulled off the road and sat and watched the Telkom employee at work.

The Telkom employee attached the sawn off end to the back of the bakkie and towed it for about 1,5km to 2km, dragging the copper cable from under the ground.

Then he stopped the bakkie and returned to saw off the other exposed end of the cable, which he cut into smaller pieces and loaded into the Telkom bakkie.

The observer was convinced that the Telkom employee was stealing copper cables from his own employer and called the police, who promptly pounced on the suspect and arrested him.

Whether the employee was acting alone or is part of a wider syndicate within Telkom stealing copper cables remains unknown.

On the same day as the arrest it was reported that Telkom’s acting CEO, Jeffrey Hedberg, the man many had hoped would turn the ailing national fixed-line operator around, had resigned and would leave the ­company in early March.

Hedberg acquired a reputation in the SA telecoms sector as a turnaround expert after he was credited with saving struggling mobile operator Cell C.

Anyone who was surprised by Hedberg’s decision has obviously not been paying close attention to recent developments at Telkom.

In fact the decision to leave is probably one of the smartest of Hedberg’s career. The fixed-line operator has been rudderless for many years, lacking any clear direction or concrete leadership, Hedberg’s brief tenure excluded.

The market has no confidence in Telkom senior management’s ability to turn the sinking ship around, a point that is made clear by the fact that the company’s share price is trading at a discount of 36% to its net asset value.

In layman’s terms this means that it would be more profitable for shareholders to sell off all of Telkom’s assets than for the company to continue running.

Recent dossiers sent to the Telkom board by members of the company’s unions have painted a picture of an organisation rife with corruption and fraud, riddled with conflicting interests and intent on covering up controversy rather than eliminating it. Many had hoped that Hedberg would be the new broom to sweep Telkom clean.

However, numerous sources have told the Mail & Guardian about a culture of senior managers collecting evidence and dirt on one another to hold guns to their colleague’s heads, not to clean out the rot but to secure their own position in the hierarchy.

If you have enough dirt on your superiors they are unlikely to act against you, no matter what dirty dealings you get up to yourself.

With a senior management team that is more preoccupied with protecting its own interests and future than with turning the ailing fixed-line operator around, is it any surprise that on the same day the story broke about Hedberg’s resignation a Telkom employee was caught stealing copper cables?

Telkom is eating itself from within and the company appears to be the walking dead. Urgent action is required, but the government has other intentions.

With Hedberg making himself unavailable for the top job and chairperson Jeff Molobela also soon to depart, the consensus is that government will take the opportunity to make sure that its own man is put in place as chair.

Speculation has linked mining magnate Lazarus Zim to the position. The government has a so-called golden share in Telkom, which comes with its 39,8% shareholding.

It allows it to appoint five out of 12 directors to the Telkom board, including the chairperson. This will give it significant power to ensure that the new CEO will also likely be its preferred choice.

The “golden share” is set to expire in a few months, but new communications minister Roy Padayachie was reported late last year saying that the government did not want to give up the control it exercises over Telkom.

Whether or not there is a move to try to renew the “golden share” agreement one thing is for sure, government will not leave anything to chance and the vacant positions of chairperson and CEO will be filled with approved candidates.

The only problem is that placing political considerations before economic ones may just be the death blow that will put Telkom out of its misery.

  • Lloyd Gedye is a senior business journalist at the Mail & Guardian
  • Visit the Mail & Guardian Online, the smart news source
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  • Grant P

    So anything the government has a hand in turns to **** – SAA / SABC / Telkom and the country in general under the ANC governments leadership are all steadily on a collision course with disaster, and yet the thick masses that constantly vote for them would rather see that happen than vote them out in favour of the DA who can actually do the job.

  • Mahendra

    I’m shocked that Grant P can make a comment about the existing parastatals.It was the previous regime that created them and to call us the thick masses is derogatory did he and his fellow white people ever think during apartheid to make a difference to create “a better life for all” than to put us back in the bush.

  • DaveB

    Pleased I took my so-called package in 2005 and handed back the bakkie and cell phone!
    They even diddled us on the ‘package’. Turned out that the R20 000-00 for re-skilling was actually for RE-EDUCATION, bloody useless for a man over 60 who needs some quick, quick saleable skills training.
    Anyway, those of us who were not part of the new-dispensation of stealing overtime and misusing our bakkies were advised that the package would not be available forever….so bye bye Telkom.

  • Wayne

    No, it won’t be the demise of Telkom. The gov will just piss tonnes of tax payers money into keeping it afloat.

  • Chris

    I do not think you can lay the blame of all of this at the ANC Governments door. The issues in all these parastatals existed prior to the ANC taking over and exercising their influence. The difference is that during the previous regime – there was very little or no competition to expose incompetence on both service delivery or governance. We did not have a choice and the question begs – what went on it the these organizations in the past and continues today unabated by the very same people.
    Look at the days where if you needed a fixed line in a hurry or additional extensions put into your house – you spoke nicely to the “tekie” eating his sandwiches and drinking his tea from a well worn flask all extracted from the traditional “Tin Brief Case –( that normally contained the tools of the trade – Flask, Sandwiches, Scope Magazine and a pack of XXX Mints to make his breath smell lekka when visiting the local house wife”) under the tree in your area – and of course do not forget the little toweling hat pulled on tight – and for this exceptional service your contribution was a bottle of “ Oude Meester” or Klippies!! Were you ever charged for the extension or the additional handsets!!!
    So what has changed – not much. The same can be said for SAA etc although SAA still ranks highly as a service provider on the global stage.
    So for us to continue to lay blame on a government that inherited “companies” with a culture that was already questionable, is not really correct. We should rather not partake or turn a blind eye to dubious activities perpetrated by both internal and external suppliers. After all “ willing buyer, willing seller!!!
    I do not belong to any political party. But as a South Africans we can no longer just point fingers.

  • Khan

    And to make matters even worse , I know here that telkom mobile 8ta is just appointing staff without following labour law processes. The post are not even advertised. Senior managment at its best…….

  • http://securethink.blogspot.com Allen Baranov

    Chris – nice point but your argument isn’t really a strong one – summed up it is “We suck but we suck less than the guys before us”.

    The ANC has had plenty time to get Telkom sorted out. I remember when Neotel was gearing up, everyone pretty much wrote it off becuae of how powerful Telkom was. Now Telkom is failing. (Neotel is also in a bad place but not because of Telkom being so strong). Maybe its better that Telkom slowly falls away and new smaller and better telephone companies make their name in the industry. True financial darwinism.

    Sadly, if Telkom was so strong we’d all be complaining about the ANC protecting it.

  • Muk

    My user experience of Telkom has changed. I moved house in late november, and within 3 days my line was connected, and ADSL up and working.

    Service levels are questionable, but I sit here, talking to my customers on a Telkom landline (still the cheapest rates), using my Telkom ADSL to connect to the Internet (still cheaper than Vodacom and MTN or CellC) and have business continuity.

    I think we should stop complaining, expose the lack of service we personally experience, and make positive comments.

    On another note: Mandela was released from jail 21 years ago..so the kids who were born in that auspicious year, are now starting real jobs, probably at Telkom or Eskom or another para-statal. These kids had nothing to do with the struggle, had no liberation influences, and yet they end up getting the short of end of the stick. Sorry, but the older guys need to transfer skills to these youngsters. What will get us, all of us, is if we remain stuck in the past, blame each other. We need to take responsibility for our actions, and when people mess up, we must say something! Don’t blame the old Nats or the new Nats – they all messed up Nats..

  • http://www.cablemap.info Greg

    @Muk 100% right – Telkom’s problems are all managerial. Once the service request makes it through the bureacratic maze to the street techie, they rock up at your gate with a smile and sort it out. There are obviously bad ones here and there that steal cables, but I’m generally impressed with the techies.

    As a mobile WASP, my company has had to deal with 8ta at a technical level – and they’re the best out of all the mobile providers in that respect.

    Just such a pity they can’t get decent management in.

  • Arina

    Greg, I agree, the tech guys are good. Friendly and willing. I think a copper cable or 2 disappeared in the communication channel that feeds the techies the info!
    I complained about “no service” (no service because I was not getting any service in addressing the problem at hand.) The problem had been my faulty bill not being addressed. Poor tech ouki gets sent out to my address: “no ADSL service”! Needless to say, his time was royally wasted but at least we had a good chat and he was able to “reconnect the service that had never been out of service!

  • Koos

    I’m looking for a Labour Attorney who will assist because I was informed in writing to go and see a psychiatrist by a non qualified management to make such a statement. I and want to sue Telkom. They say they are big and got a whole floor of Attorneys.

  • http://none Shawn Smith

    Hi All

    Everyone has a problem with Telkom, the best TELCO in SA ,services the masses and the cheapest by far. Lets not be judgemental and provide solutions to grow our county’s telecommunication footprint. Telkom is here to stay. Viva ANC Viva

  • kingrob

    The ONLY way that Telkom can become a competitive company in South Africa, is when it’s privatized and run without government interference.

    I suspect Vodacom or MTN might be mildly interested in buying it, but it most probably will go to the Chinese. Telkom just took out a huge loan from them for 8.ta, but we all know that money will just be used to pay the many senior managers extra bonuses & then that money will be gone.

    @Shawn Smith, you made me LOL uncontrollably. Thanks dude. :D

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