for the year ended 31 March 2011
Telkom announced on 4 June 2010 that Mr Reuben September will retire as Group Chief Executive Officer ("GCEO") and also relinquish his directorship at the expiry of his contract. Mr Reuben September agreed with the Telkom Board to step down as GCEO and resigned as a director from 7 July 2010.
Mr Jeffrey Hedberg served as Acting GCEO. His contract expired at the end of March 2011. The Board of directors have requested Mr Hedberg to remain at Telkom in an advisory capacity until the release of the Group's annual results in June 2011.
On 17 March 2011, the Telkom Board announced the appointment of Nombulelo Moholi as Group Chief Executive Officer ("GCEO") with effect from 1 April 2011.
The Telkom Board believes that this appointment provides leadership, continuity and stability at an important time given the number of key strategic and operational deliverables.
Telkom announced on 13 July 2010 that Mr Peter Nelson resigned as Group Chief Financial Officer ("GCFO") and also relinquished his directorship.
While under the leadership of the Acting Group CEO, Jeffrey Hedberg, the Group has initiated the process of appointing a new GCFO. Mr Deon Fredericks, Group Executive: Accounting Services is acting as GCFO until the process is finalised.
Mr Jeff Molobela retired as Chairman of Telkom and he was re-appointed as a non-executive director of the Telkom Board for a period of three years with effect from 16 February 2011.
Telkom is grateful to Mr Molobela for his leadership, dedication, contribution and service during his tenure as chairman of the Board.
Mr Polelo Lazarus Zim was appointed as a non-executive director for a three year period and as Chairman for a 1 year period with effect from 16 February 2011.
Mr Brian Molefe resigned as a non-executive director of the Board of Telkom with effect from 20 April 2010 as a result of the end of his employment contract with the Public Investment Corporation Limited.
Mr Younaid Waja was appointed as a non-executive director on the Board of Telkom with effect from 20 April 2010.
Mr David Barber resigned as a non-executive director of the Board of Telkom with effect from 20 April 2010.
Dr Ekwow Spio-Garbrah's appointment as a non-executive director of the Board of Telkom was terminated with effect from 1 May 2010.
Dr Victor Lawrence's appointment as a non-executive director was terminated with effect from 15 February 2011.
Mr Navin Kapila was appointed as a non-executive director for a three year period with effect from 16 February 2011.
Ms Reitumetse Jackie Huntley and Ms Julia Ntombikayise Hope were re-appointed as non-executive directors for a period of three years, with effect from 16 February 2011.
On 14 April 2010, Telkom announced that in line with its mobile strategy it concluded a five year national roaming agreement with MTN South Africa in terms of which Telkom and its customers will have national access to MTN's 2G and 3G network throughout South Africa. Telkom placed orders to build 2000 new base stations in selected high density areas over the next two years.
The capital outlay for mobile related investments over the next 5 years is expected to be approximately R6 billion. The conclusion of the roaming agreement with MTN South Africa enhances Telkom's ability to offer Telkom customers extensive national mobile coverage from day one of launch and accordingly, is key to the delivery of a successful mobile strategy.
The Telkom Board approved the offering of voluntary severance packages (VSP's) and voluntary early retirement packages (VERP's) to all management and bargaining unit employees. The key exit dates were 28 April 2010 until 2 July 2010 for the management employees and 31 March 2011 and 30 April 2011 for the bargaining unit employees. 186 management employees accepted packages resulting in a cost of R147 million. 1,632 bargaining unit employees accepted packages at 31 March 2011 resulting in a cost of R536 million. 189 bargaining unit employees accepted packages at 30 April 2011 resulting in a cost of R53 million. It is expected that 9 bargaining unit employees will accept packages at the end of July 2011 at a cost of R3 million. Employees exiting on the 31 March 2011 qualified for six months notice pay and those exiting on the 30 April 2011 qualified for four month's notice pay.
The offer is aimed at enabling the Group to achieve its business objectives by specifically focusing on implementing a strategic workforce plan linked to the long term business strategy and optimising staff levels.
During the year management initiated the integration of MWEB Africa Limited and Africa Online Limited subsidiaries under the brand of iWayAfrica Group. Management believes the integration will achieve financial synergies by improving economies of scale and eliminating duplication of functions. The integration process is ongoing.
On 18 October 2010 Telkom launched it's new mobile brand called "8•ta".
The launch of Telkom's mobile brand under the new name 8•ta is undoubtedly the most significant achievement to date, one that will allow Telkom to not only counter the threat posed by competition such as fixed-to-mobile substitution (and the resulting decline in fixed-line voice revenue) but also grow Telkom revenue by providing mobile services and products to consumer and business markets.
Launching a retail brand is a massive undertaking that consists of a myriad of components - among other things the network and technology aspects, billing, products and services, distribution channels and the marketing drive to create awareness and generate sales.
8•ta is built on a number of core pillars. These give the brand a unique personality that tells the customer what 8•ta stands for and why it is different to other brands in the mobile market:
Telkom's 3 year exemption from certain sections of the PFMA ended on 25 October 2010. On 17 November 2010 the Minister of Finance approved a further 3 year exemption expiring on 26 October 2013.
On 26 November 2010, Telkom announced that the Board had mandated management to review options for the exit of the CDMA business of Multi-Links Telecommunications Limited in Nigeria.
On 31 March 2011, Telkom and Visafone Communications Limited ("Visafone") entered into a legally binding agreement regarding the sale of the Multi-Links' CDMA business to Visafone.
The sale is conditional on inter-alia regulatory approvals and renegotiation of the Helios contract. Upon the successful closing of the transaction, Telkom will retain Multi-Links' fibre network and fixed-line operations in Nigeria.
In terms of Telkom's Memorandum and Articles of Association, the holder of the Class A and B shares in the ordinary share capital of Telkom, were defined as a "significant shareholder", which were afforded certain extra - ordinary rights. The Government of the RSA was the A shareholder and Thintana Communications (the previous strategic equity partner) was the B shareholder. Thintana Communications ceased to be a significant shareholder in November 2005.
The Government of the RSA is the largest shareholder (major shareholder) in Telkom SA Ltd, holding 39,8% of Telkom's issued share capital. The Governments' extraordinary rights as contained in Telkom's Memorandum and Articles of Association persisted until 4 March 2011 – eight years from the listing date of Telkom on the JSE, the date also, upon which the Government ceased to be a significant shareholder. The Class A share has ipso facto been converted into ordinary shares.
The Memorandum and Articles of Association of Telkom will be harmonised into a Memorandum of Incorporation (MOI) to bring it in line with the JSE Listings Requirements, King III and the new Companies Act 71 of 2008.