Note 21: Significant matters

for the six months ended September 30, 2010

Resignation of Telkom Group Chief Executive Officer

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. However Mr Reuben September agreed with the Telkom Board to step down as GCEO and resigned as a director from 7 July 2010.

Appointment of Acting Group Chief Executive Officer

The Telkom Board has commenced the process of appointing a new GCEO. In the interim Mr Jeffrey Hedberg has been appointed as Acting GCEO.

The Telkom Board believes that these arrangements provide leadership, continuity and stability at an important time given a number of key strategic and operational deliverables.  

A successor to Mr September will be announced in due course.

Resignation of Telkom Group Chief Financial Officer

Telkom announced on 13 July 2010 that Mr Peter Nelson retired as Group Chief Financial Officer ("GCFO") and also relinquished his directorship.

The Board thanked Mr Peter Nelson for his valuable contribution to Telkom and has wished him well.

Appointment of Acting Group Chief Financial Officer

Under the leadership of the Acting Group CEO, Mr Jeffrey Hedberg, the Group has initiated the process of appointing a new CFO. Mr Deon Fredericks, Group Executive: Accounting Services will act as CFO until the process has been finalised.

Change in directors

Mr B Molefe resigned as a non-executive director (Class B Shareholder representative) of the board of Telkom with effect from 20 April 2010 as a result of the expiry of his employment contract with the Public Investment Corporation Limited.

Mr Younaid Waja was appointed as a non-executive director (Class B Shareholder representative) on the Board of Telkom with effect from 20 April 2010. In terms of the Company's articles of association, the Public Investment Corporation Limited, Telkom's Class B shareholder, has the prerogative of appointing the Class B shareholder representative.

Mr D Barber resigned as a non-executive director of the Board of Telkom with effect from 20 April 2010.

Dr Ekwow Spio-Garbrah resigned as a non-executive director (Class A Shareholder representative) of the board of Telkom with effect from 1 May 2010.

Telkom concluded a roaming agreement with MTN South Africa

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.

Voluntary severance packages

On 31 March 2010, the Board approved the offering of voluntary severance packages (VSP's) and voluntary early retirement packages (VERP's) to all management employees from 28 April 2010 until 2 July 2010. 186 employees accepted the packages, resulting in a cost of R144 million.

Integration of MWEB Africa Limited and Africa Online Limited

During the year management initiated the integration of MWEB Africa Limited and Africa Online Limited into a single entity, iWayAfrica. Management believes the integration will achieve financial synergies by improving economies of scale and eliminating duplication of functions. The integration process is ongoing.