Sipho Maseko

Telkom CEO Sipho Maseko said Telkom faced an uncertain future with an unsustainable financial situation, increased competition, and customers hating the company.

Speaking at the annual SATNAC conference, Maseko said between 2012 and 2014, Telkom was facing an existential crisis.

“The financial performance of the company was unsustainable, we had a weak mobile business, and our staff compliment did not match our revenues,” he said.

He added that “customers hated us” and that the company’s brand perception was very poor.

At the time, Telkom also had a broken relationship with the government, and it was facing increased competition from other telecommunications players.

Maseko’s SATNAC presentation echoed that Telkom was still grappling with its monopolistic past, which has hampered its ability to function in a competitive market.

He said when Telkom enjoyed its legally protected monopoly, and someone wanted a fixed line or broadband connection, it was the only game in town.

“We had salespeople – the title on their business cards said sales – but you were the only guy from whom they could get the service. So, you are not a sales guy,” Maseko said.

“Telkom only really began to sell products around 2010. Before that, the company was a monopoly which took orders.”

When competition arrived, Telkom struggled to adapt. It started to lose market share to new players like Vumatel and faced increased competition from mobile operators.

To address the challenges at Telkom, Maseko said they made small improvements across the business.

He said they engaged with all their stakeholders to get their input on the way forward for the company.

After these engagements, Telkom created a clear long-term strategy with short term goals to set the company on its transformation path.

The strategy included:

The turnaround of its financial performance.
Restoring the confidence of the government and shareholders.
Deal with legal and regulatory issues quickly.
Review its operating model and create separate business units.
Improve employee performance.
Focus on customer needs.
Maseko said this transformation strategy returned Telkom to relevance which included stabilising the business and entering a sustainable growth phase.

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