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  • Analysts hail Maseko’s Telkom ‘masterclass’ as he bows out

Analysts hail Maseko’s Telkom ‘masterclass’ as he bows out

Samuel Mungadze
By Samuel Mungadze, Africa editor
Johannesburg, 26 Jul 2021
Telkom group CEO Sipho Maseko
Telkom group CEO Sipho Maseko

For eight years, Telkom CEO Sipho Maseko gave a masterclass on how to run a telephony company, thriving in an extremely competitive environment, analysts say.

The analysts who reflected on Maseko’s time at Telkom say he steered the group through turmoil, surpassing Cell C to become the third-largest mobile network operator in the country.

For his efforts, Maseko was rewarded handsomely with more than R35.4 million in remuneration in the 2021 financial year, according to Telkom’s latest integrated report released today.

To cap it, the analysts who spoke to ITWeb say, Telkom’s data revenue and average revenue per user (ARPU) continue to ascend despite the tough environment.

On Friday, Telkom announced Maseko is leaving the telecommunications company after eight years at the helm.

Maseko joined Telkom from Vodacom on 1 April 2013, at a time when the organisation faced severe challenges.

Now, the analysts say, he leaves a rich legacy at Telkom, characterised by his ability to turn the business around and evolving it from a traditional fixed business, to a portfolio comprising the mobile, IT, wholesale infrastructure business and the masts and tower portfolio.

Corporate firebrand

“He brought the degree of stability and continuity that Telkom needed in order to thrive, which it did,” says Spiwe Chireka, independent telecoms analyst.

“During his time, Telkom moved from what we described at the time as ‘a late entrant, destined to fail because of the inefficiencies that were inherent in the company’, to a company that managed to chip away notable market share from all the big three players, to become a viable competitor in the market.

“Openserve, Free Me and BCX happened under his tenure, all of which significantly changed the trajectory of the company to the player it is today.”

For Ofentse Dazela, director for pricing research at Africa Analysis, Maseko will be remembered for a number of initiatives that were prioritised under his tenure.

“Key among those [initiatives] was transforming the company’s mobile retail arm into a profitable subsidiary that it has become today. Through its aggressive data pricing strategy, Telkom has, to date, become the fastest growing mobile network in the local market, and has proved its new subscriber acquisition prowess, while its competitors continue to come short.

“Under Maseko’s guidance, Telkom has actually surpassed Cell C to become the third-largest mobile network operator in the country, and its data revenue and ARPU continue to soar, even during this current period of slow economic growth.”

Further, Dazela says, Telkom’s wholesale division, Openserve, was rebranded and morphed to become the second largest fibre network (FNO) in terms of houses passed.

“Openserve was actually the biggest FNO in the country in terms of houses passed and connected, until it lost that leadership status to Vumatel in recent months. Today, Openserve is one of the cheapest fixed-line networks in the country, and this has ensured these prices cascade down to the retail market, allowing consumers to receive high-speed broadband solutions, such as fibre, at cheaper price points than most of its competitors.”

Not an easy road

Both Chireka and Dazela are in agreement that one of the most difficult projects Maseko had to tackle was to reduce staff headcount, and turn the company into an agile, responsive, customer-centric and more efficient organisation.

The unions resented him for this, with Communication Workers Union secretary general Aubrey Tshabalala telling ITWeb on Friday: “To us workers, particularly in the bargaining unit, Sipho Maseko’s era represents a regress in many areas. His era was characterised by massive job losses and selling of the SOE's [state-owned enterprise’s] assets to make the balance sheet look good.”

Nonetheless, Dazela says, Maseko has been an exceptional and courageous leader who got himself acquainted with operational activities.

“His direct influence was not only evident internally at Telkom Group, but he was also a man not shy to influence the SA regulatory environment, by sharing periodic opinion pieces on what needed to be done to move the ICT sector forward. He also availed himself at key market inquiries; eg, the data services market inquiry, not only to defend and articulate Telkom’s position, but also to point out existing shortcomings in the market that needed to be addressed,” he says.

Maseko will step down as group CEO and executive director of Telkom and its subsidiaries on 30 June 2022 and the company has promised to announce a designate group CEO in the not too distant future.

Chireka cautions that Telkom must find “an outsider” like Maseko himself, “someone with private industry (as opposed to SOE) experience and clout and ideally from within the industry. This proved to be what brought us from years of frustration with Telkom leadership, particularly the CEOs, to rooting for the company, based on a viable contender in the sector. I believe, if it’s not broken, don’t fix/change it!”

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