{"id":8890,"date":"2012-04-02T12:10:12","date_gmt":"2012-04-02T10:10:12","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=8890"},"modified":"2012-04-03T10:52:12","modified_gmt":"2012-04-03T08:52:12","slug":"telkom-with-ceo-moholi-one-year-on","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/telecommunications\/8890\/telkom-with-ceo-moholi-one-year-on\/","title":{"rendered":"Telkom with CEO Moholi – one year on"},"content":{"rendered":"

Nombulelo (Pinky) Moholi<\/a> took over from Jeffrey Hedberg<\/a> as Telkom’s<\/a> CEO on 1 April 2011. Twelve months later, the company is still in trouble with poor financial results and a falling share price.<\/p>\n

When Moholi took over from Hedberg, she inherited many problems, including a struggling Multi-Links, sliding fixed-line numbers and losing market share to the mobile operators.<\/p>\n

Telkom was further hit by the departure of four senior executives – strategy chief, Naas Fourie; Telkom International MD, Thami Msimango; procurement head, Stafford Augustine; and group executive for network provisioning, Marius Mostert – shortly before Moholi\u2019s appointment.<\/p>\n

At the time of Moholi\u2019s appointment, analysts were divided on her suitability for the role. Some analysts felt that it may have been a political appointment, and said at the time that they would have liked to have seen an international candidate, with experience in turning companies around, taking up the role.<\/p>\n

Others felt that Moholi was the right person for the job, as she had a lot of experience at Telkom, and knows the industry well.<\/p>\n

Despite the differences in opinion about Moholi\u2019s appointment, analysts agreed that they would like to see a clear strategy by Telkom on Multi-Links; how the company would make 8ta profitable; and how Telkom would stop the continuing decline in fixed-line subscribers.<\/p>\n

Time to take stock<\/strong><\/p>\n

Over the last twelve months, Telkom has failed to impress investors. The company\u2019s share price declined by 35%, and the its finances are not looking good.<\/p>\n

On Friday, 30 March 2011, Telkom announced that its headline earnings per share (HEPS) is likely to fall by around 25% for the year ending March 2011. Basic earnings per share from continuing operations for the year ending 31 March 2012, are expected to be at least 90% lower than the prior year.<\/p>\n

Even a potential deal with Korea\u2019s KT Corporation<\/a> could not stem the decline in the company\u2019s share price.<\/p>\n

The following graphs clearly show the decline in Telkom\u2019s share price, and hence, the lack of confidence in the company\u2019s financial performance from investors.<\/p>\n

\"Telkom<\/a>

Telkom share price - April 2011 - March 2012<\/p><\/div>\n

\"Telkom<\/a>

Telkom share price - April 2010 to March 2012<\/p><\/div>\n

Under Moholi, Telkom rid itself of the money-guzzling Multi-Links, but was unable to stop the continued decline in fixed-line numbers.<\/p>\n

At the end of September 2011, Telkom had 4,073,000 fixed line subscribers – down from 4,234,000 a year earlier.<\/p>\n

Telkom is also continuing to lose lots of money on 8ta<\/a>. In the March announcement, Telkom said that the EBITDA loss incurred by the mobile business (8ta) is approximately R2.2 billion.<\/p>\n

New strategy<\/strong><\/p>\n

At the end of 2011, Telkom announced that it has set out to review and align its overall strategy, and implement a 5\u2011year plan that will enable the company to achieve its aspirations.<\/p>\n

The strategy, Telkom said, is driven by a number of thrusts across four strategic areas, including:<\/p>\n