The end of September

"Telkom is a giant ocean liner that cannot be turned around at a whim." This was the sentiment of Danie du Toit, Telkom`s MD in 2003. At the time, Du Toit had a vision of making Telkom a sleeker, more agile business and, while it isn`t there yet, outgoing CEO Reuben September has done his level best to give the business a sleek new life.Telkom surprised industry and shareholders alike when it announced a few weeks ago that September had decided to retire from the company, and local telecoms specialists have called the resignation a troubling sign for the fixed-line giant.

September has spent the better part of his life at the utility, starting at the lowest levels of engineering as a pupil technician, when the company still formed part of the Department of Posts and Telecommunications.

The department recognised his potential and allowed him a chance to study at the University of Cape Town, where he graduated with a degree in Electrical and Electronic Engineering. His appointment also made him the first black engineer to be employed by government.

A mighty distinction for a young boy from the Cape Flats.

For 33 years, September has climbed every rung on Telkom`s employment ladder, and it seems hard to believe that after the investment, both in time and energy, it will come to an end soon.

Former CEO of Vodacom, Alan Knott-Craig, in his recently released biography, spoke highly of September`s work ethic. September reported directly to Knott-Craig before he hit the top rungs of Telkom and Knott-Craig says: "Even then, Reuben had drive, talent, ambition and charisma."

By April 2007, his credentials and persistent work ethic led him to take up the reins of Telkom as acting CEO and later that year was offered the position in a full-time capacity.

He took over from former Transnet group executive Papi Molotsane, who was booted by the board not even 18 months after he was appointed.

September`s retirement may not have come as a surprise to many in industry, especially since rumours are circulating that the newly-appointed chairman, Jeff Molobela, and September have never managed to work well together.

Other executives have also left the company, taking up "voluntary retrenchment packages" and, according to Absa Investments analyst Chris Gilmour, many of the executives that Telkom wanted to keep were not allowed to take the packages.

THE BITTER

When September leaves Telkom at the end of this year, he will likely look back on his leadership in two minds.

On the one hand, his run has been rocky, and his reputation has taken several knocks. With considerable industry changes, Telkom has seen an increase in competition and declining revenue from fixed-line services.

Irnest Kaplan, MD of Kaplan Equity Analysts, says because of the changes, the entire management team at Telkom has been under heavy pressure from investors and shareholders.

Kaplan believes that, while Telkom is still a strong company, there are several issues that have not been well tackled. However, he is quick to say blame cannot be set at the feet of any of the executives, even though a change must be made.

He says Telkom needs a leader that has experience in turning an incumbent into a competitive business.

BMI-TechKnowledge MD Denis Smit says there must have been a difficult relationship between shareholders and September, specifically with the many problems the company faces at the moment.

He points to the fraud charges against two of its management employees in relation to cable theft, and the various legal battles it is fighting in terms of tender irregularities.

One of the tender troubles has implicated September directly, accusing him of misconduct.

Telkom is also facing a possible hefty fine of 10% of its revenue, which could see it pay a fine of up to R3.37 billion for anti-competitive behaviour. The case has not yet been before the Competition Tribunal.

THE SWEET

Despite the troubles, September will also have a good legacy to leave behind, something solid that his successor can build on.

Under his leadership, Telkom started implementing several turnaround strategies that will help streamline the business. He had already split the business into three distinctive operations and found leaders for each of these, namely Telkom SA, Telkom International and Telkom data centre operations, now known as Cybernest.

The company`s announcement also says he played a pivotal role in leading the disposal of the 50% interest in Vodacom, as well as the start of the mobile plans.

"As an expert in network design and build, he was instrumental in driving network digitalisation and upgrade initiatives, as well as embedding the next-generation network technologies required to support fixed-mobile converged services," the company explains.

And while Telkom is still something of a mega structure, there are signs that his methods will help the company gain a sharper turning circle.

WHO`S UP NEXT?

The first signs of changes at Telkom came last year when it reappointed former Telkom executive Nombulelo "Pinky" Moholi as Telkom SA`s new MD. Moholi is being tipped by analysts as a solid replacement for September, although Telkom has not yet made its decision.

At the company`s results presentation last week, all Moholi would say is that the board has not yet decided who will take over the reins at the company.

Moholi, an ICT veteran, left Telkom under difficult circumstances in 2005, when she headed up sales and marketing. She was widely respected within and outside Telkom as an executive and was earmarked to replace Sizwe Nxasana as CEO, who was Telkom`s head before Molotsane.

Nedbank appointed her as a member of its turnaround team at a time when the financial giant was having its own difficulties. "I will have a similar task at Telkom as I did at Nedbank. Trust needs to be rebuilt and the negativity about management changed. It is easy to destroy trust, but hard to build it back up. It`s going to be a good challenge," Moholi said when she rejoined Telkom last year.

At the time, Moholi`s appointment sparked speculation that September was on his way out, a notion that Telkom and government vehemently denied. September`s sudden resignation has rekindled the expectations that Moholi is in place to take over the reins.

Smit says Moholi is an ideal candidate to take up the position when September leaves. "She is well respected and understands the industry."

UNDER THE COUNTER

With Moholi`s reappointment to Telkom last year, Gilmour says it`s likely a foregone conclusion that she will take up the lead.

Telkom now needs someone who understands the industry. He agrees that Moholi is the likely choice for the next leader of the fixed-line business. However, he says the way Telkom announced September`s retirement seems a little underhanded. "He deserves more respect than that," he adds.

Having come from an old-school employment regimen, Telkom is expected to appoint someone from within the company as its next leader. However, most analysts are saying Telkom needs a fresh new face to take charge of the business.

EXPECT A SURPRISE

In an interesting turn, Gilmour suggested there may well be a surprise face when the board makes its announcement. He says Arcerlor Mittal`s current CEO, Nonkululeko Nyembezi-Heita, could make a good replacement.

Nyembezi-Heita has only been at Mittal for two years; however, she was formerly an executive at Vodacom and had been on the board of arivia.kom.

As a major stakeholder, with over 30% ownership, government along with the board will be responsible for selecting a replacement for September.

Telkom bid "au revoir" to September in its annual results booklet, accurately detailing his career at the company as "a life and vision, dedicated to Telkom".