‘When the president asks you to take on the role of the Chairman of Telkom, you can’t say no. He is the president after all.’ These were the words of Jabu Mabuza as he addressed our recent CEO breakfast hosted by EY. Chosen for his strong and independent leadership style, Jabu said that he had one request and that was that he select the board and that the board selects the CEO. It seems that this approach has paid off. With a strong management team, a nimbler and fresher Telkom’s share price has increase 5 fold since November 2012 and government – with an almost 40% stake – has not interfered in the running of the company.
Broadband access still remains an issue in South Africa. Ranked only 80th globally for internet usage according to the UN’s State of Broadband 2013 Report, South Africa lags behind many other countries with regards to broadband accessibility and affordability. Our National Broadband Policy, SA Connect, has also been criticised for its lack of milestones and a deadline of 2030 which is not ambitious enough to help South Africa remain competitive. With World Bank research stating that a 10% increase in broadband penetration can provide GDP growth of 1.3%, South Africa needs affordable ubiquitous broadband. Not only will this provide opportunities and transform society, but it will help diminish the digital divide, particularly in the rural areas.
Fortunately Telkom, as main infrastructure lead of SA Connect, owns 92% of cable in South Africa (147 000km out of the total of 161 000km) and wants to champion the strategy to expedite the 2030 targets. Jabu feels that more collaborative working must take place between telecommunications and technology companies, metros and municipalities to reduce duplication and ensure better technology integration. He said: ’We need to look at what we as a country can afford to do and respond in the most responsible way. We also need to think creatively about how we can grow the network of wifi hotspots by utilising post offices, police stations and government buildings. We should utilise satellite and consider how we can leverage the strength of Telkom to extend services such as e-government, healthcare and education into communities.’
However, Jabu feels that South Africa needs a more stable regulatory environment particularly relating to the equitable distribution of spectrum. The current draft legislation has potential to create an unfair environment as those with the bigger pockets can afford more. This topic provides for interesting debate especially as Europe learnt the hard way in an over-regulated environment with the industry generally favouring the US market-led approach of facilities-based competition which resulted in greater investment in next-generation broadband technologies.