Telkom AR front.qxp

22
Telkom Annual Report 2009
Chief Executive Officer’s review (continued)
segmentation. Additionally, we will concentrate
on fostering long-term relationships with
enterprise and wholesale customers through
volume and term agreements.
Build customer loyalty
We will continue to position Telkom as the
service provider of choice through superior
value propositions and constant product and
service innovations. We will also upgrade
our customer communication programme.
Grow profitable revenue through
broadband and converged services
Profitable revenue growth in our broadband
and converged services area will be driven
by continuing to increase converged services
revenue; pursuing partnerships with content
providers to enhance our products;
aggressively seeking to improve our market
share in the information technology services
sector and improving our innovation
capabilities.
We are in no doubt that the next
battleground of the convergence between
telecommunications and IT will be in the
data management environment. We have
one of the finest National Network
Operating Centres in the world and we
will use it to provide our customers with
cost-effective solutions that support their
total ICT needs. We expect to stimulate the
use of bandwidth over our network through
our data centre business.
Several products, including Metro LAN,
have been introduced to strengthen our
data communications service capabilities
and improve our integrated communications
service offerings in response to increased
demand for higher bandwidth in the
corporate and global segment.
Grow profitable revenue through
wireless voice and mobile data services
By providing customers with an integrated
bundled offering with superior speeds and
quality through our fixed-line network,
combined with mobility when required, we
can grow profitable revenue.
This we can do by transforming our fixedline
business to incorporate services such
as mobile converged voice services and
by building a wireless voice and mobile
data network in areas that use less
vulnerable access technologies, which will
reduce the theft of copper cables and
improve service levels. We will also enter
into, among other things, a roaming
agreement in the areas where we choose
not to build our own network.
To implement this strategy we have
obtained access to the 1800MHz and
2100MHz spectrum bands to utilise 2G
and 3G technologies in pursuit of our voice
and mobile data services. By focusing on
higher value customer segments and
technologies that enable roaming across
networks that use different mobile
technologies, we can offer wireless access
to, amongst others, campuses, gated
communities and security complexes and
provide mobile data services and
fixed/nomadic voice services.
Our move to offering a fully fledged mobile
service depends on the outcome of a
market research programme and a roaming
agreement we are currently negotiating with
the South African mobile operators. At this
stage, we will not commit to any capital
expenditure before completion of the
comprehensive market study.
Grow profitable revenue internationally
Telkom aims to increase revenue and longterm
profitability from our African
subsidiaries we have acquired and from
the international services we provide. We
will become a Pan-African integrated
service provider that offers international
communications and internet connectivity,
hosting and managed data services and
wireless voice and mobile broadband
solutions. We have the opportunity to
leverage synergies from Telkom South
Africa into our Africa subsidiaries,
capitalise on strategic partnerships, for
example, with AT&T, and advance data
services into a growing market in Africa.
Executing our strategy
We will execute our strategy through the
Telkom Renaissance initiative which has
been initiated with the objective of
transforming us into a leading Pan-African
communications company. Delivering on
this requires a compelling and focused
transformation programme. This programme
consists of various initiatives including
defending our market share, seeking new
revenue and businesses, implementing a
structure that enables clear profit and loss
accountability, as well as ensuring that our
business processes and work practices
deliver upon our strategic intent.
This is aimed at achieving certain key
financial targets, such as improving our
EBITDA by increasing the return on our
assets, making effective capital
expenditure investments, as well as
improving our cash flow. We intend to do
this by significantly improving revenue
through our strategic initiatives, capturing
operating expenditure efficiencies,
focusing on expenditure in areas where we
can increase our return on assets and
critically challenging capital expenditure
planned for the next few years.
We embarked on the initiative towards the
end of the year under review and our
inspirational objective is creating a new
Telkom. It is a bold, new journey for the
Group and its scope and importance is
such that it will roll out over two years. It is
a phased and planned programme that
will transform our Group’s culture and the
way we do business. It will ensure full profit
and loss accountability throughout the
organisation and will enable us to focus on
efficient resource management and cost
containment. Our financial objective is a
10% reduction in operating expenses by
the financial year ending 2011/2012.
Currently we are conducting a Group-wide
survey to analyse our current culture and
give employees the opportunity to provide
their views on what our culture should look
like. I believe that this is essential if we are
to have a firm foundation on which to build
the remainder of the process.
Underpinning the programme is the four
‘Rs” strategy: