Telkom has ‘many arrows in its quiver’: Taukobong

Telkom CEO-designate Serame Taukobong believes the company’s investments in a range of areas – from fixed lines to mobile to IT services to property management to financial services – will stand it in good stead in the coming years.

Taukobong was speaking to TechCentral in an interview on Wednesday after Telkom announced that he would replace outgoing CEO Sipho Maseko in June 2022. Taukobong, who joined Telkom three years ago from MTN Group, has led the company’s consumer business until now.

TechCentral’s Duncan McLeod asked Taukobong a range of questions, including whether he’ll take over from Maseko earlier than mid-2022 and where he believes Telkom fits into a competitive telecommunications industry.

Duncan McLeod: When MTN Group announced the departure last year of CEO Rob Shuter and the appointment of Ralph Mupita, there was also meant to be a lengthy handover period. However, within a short period of time Shuter had left. Will the same happen at Telkom?

Serame Taukobong: It’s a matter of looking at timing, to say how far we go. The plan is to capture as much as we can (from Maseko) in a short as possible period.

McLeod: Maseko isn’t in a hurry to go anywhere, though is he? He hasn’t got another job lined up?

Taukobong: No, no. After nine years at the helm, another 10 months won’t hurt, especially with what’s sitting in that head of his.

McLeod: Do you know why he’s chosen this particular time to step down? Did he just feel he achieved what he wanted to?

Taukobong: Yes, you know, I think Sipho’s sentiment when he announced (his departure to employees) was, “Guys, I’ve been at the helm (for a long time), I’ve taken this ship as far as it can be taken, and it’s time for young blood to step in.”

McLeod: I find the timing quite interesting, because he’s announced this big value-unlock strategy, which was referred to in the statement about your appointment – like unlocking value in the masts and towers business. He’s alluded to the data centre business potentially being unbundled as well as other mechanisms to unlock shareholder value, which he now may not get a chance to see through. So, I think the markets may be a little bit surprised that he isn’t sticking around for another year or two to see that through.

Taukobong: We’ve all been a part of group exco (and made decisions together). We’ve all been participating and actively engaging in all these strategies, so I think it’s a matter of timing – this is not a 100m sprint, it’s almost like a 400m or an 800m relay. His view is, “I’ve got you guys out of the starting blocks, here’s the baton, complete the race.”

McLeod: Maseko has done a heck of a lot over the last eight years or so. Telkom has been massively streamlined in that period. I think its headcount has dropped by about 50% or 60% since he joined, which was obviously very necessary given the headcount of competitors and the need to be efficient in a highly competitive market. In your view, taking over as CEO now, do you think Telkom is fit for purpose?

Taukobong: The theme originally when the process started was “fit for purpose”. If you look at the shape of the various businesses now, we certainly are fit for purpose. The consumer business, where I come from, is doing quite well. Openserve (Telkom’s wholesale division) is starting to kick in quite nicely now. We saw in our quarterlies that fibre has now actually overtaken copper in terms of homes connected. I think the process in Gyro (the property management business) is well under way. We’ve done a lot of work to get that process going, so I think the unbundling is not going to stop, and certainly we have no intention to drop the baton now.

McLeod: How do you see that unbundling playing out? First of all, does Telkom have the support of your largest shareholder, government, and secondly, do you see some of these businesses possibly being floated on the JSE?

Taukobong: That’s part of the journey we have to take forward, and certainly the philosophy we have is obviously that shareholders decide where and how they want to move their shares, and so far they’ve been relatively happy with our performance.

McLeod: You have a lot of experience in the telecoms industry, including at MTN Group. You know the competition well. How do you see Telkom fitting in in a competitive marketplace in the coming years?

Taukobong: The beauty of Telkom, and having come from a pure mobile business – and I did have fixed-line experience in Uganda and Ghana, too – is that you’ve got many arrows in your quiver. You’re not just dependent on mobile as a revenue stream. The combination of the mobile, the fixed, the IT business, the property business — and we are also working now at launching quite strongly with our financial services and platform businesses — so if you look at that fully integrated (approach), we are fully geared, given what is in the Telkom house, to be quite effective across all these areas.

McLeod: Are there any gaps in Telkom’s portfolio? Do you see the need to pursue acquisitions?

Taukobong: It’s about building a continuous stickiness with your customers without really going into significant investments and acquisitions at this point.

Read:  Telkom appoints insider Serame Taukobong as CEO designate

Read: Telkom to pay R20m in retention bonuses to CEO Maseko

Read: Fibre finally overtakes copper but concerns remain for Telkom

Duncan McLeod is Editor of Tech Central, on which this article was first published here.

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