Tuesday, September 30, 2008

Vodacom - South Africa

Knott-Craig bids farewell to a solid, flourishing Vodacom

VODACOM CEO Alan Knott-Craig will leave his office for the last time this evening, as he retires after 15 years as the head of SA’s largest cellular network.

In an industry where CEOs come and go, Knott-Craig’s remarkable staying power has been achieved through a combination of vision, determination and innovation that has created a company serving 34-million customers in five countries, generating an annual revenue of R48,2bn and an operating profit of R12,5bn.

He could have done more but was thwarted by the stalemate in Vodacom’s shareholding, which remains unhappily divided between Telkom and the UK’s Vodacom. Achievements would also have been greater if SA had more liberal telecoms policies — a fact that has often seen Knott-Craig vociferously slate what he sees as incompetence.

A major problem was the protection of Telkom, which forced other operators to lease their backbone infrastructure from Telkom instead of building their own. That and clashes over handset subsidies and spectrum allocation provoked him to say that the industry would fare better if the regulators stayed at home rather than went to work each day.

Yesterday Knott-Craig said he would still work for Vodacom as a consultant until March.

“Hopefully, they won’t need any consulting because they know what they are doing. If they don’t know what they are doing by now, they’ve got problems,” he quipped.

He may accept a board position or two, but his main ambition is to write more books and indulge in photography. His new book of bird photographs made its debut this week.

The most memorable part of his career was making cellphones a tool for consumers rather than just for businesses, he said.

That included selling handsets through retail outlets and advertising that targeted ordinary people, not business users.

He also established Vodaworld in 1998, the first cellular shopping mall in the southern hemisphere.

“We did a lot of things that were different from other cellphone companies. It could have gone belly-up but it was the right time and the right place,” he says. “We took a different approach and it worked and now it works for the whole world, and the world is better for it.”

The cellular industry now serves 3,7-billion users because people stopped trying to make cellphone a business tool and made it a personal tool.

The worst part has been fighting the regulations that stifle the industry in SA, he says.

“It’s been frustrating. That was negative stress, which is why I want to go. Positive stress is getting to grips with the competition, but negative stress is dealing with stupidity. We are not going forward at the rate we could have been.”

For the future, Knott-Craig sees Vodacom’s foray into television, radio and advertising on the cellphone as areas of highly profitable growth.

But he is not purely business-oriented. One of the most gratifying experiences of the past 15 years has been Vodacom’s work as a powerful force for good in the communities where it operates, he says.

Last year Vodacom sponsored Smile Week, and Knott-Craig watched an operation that allowed a seven-year-old boy born with a cleft palate to smile for the first time.

“It was one of the most moving moments of my life,” he says.

Irnest Kaplan, MD of Kaplan Equity Analysts, said Knott-Craig is seen as the father of cellular in SA, building Vodacom from a small startup into a giant. He has made a huge contribution to the technology sector and SA at large, Kaplan says.

“I’ve always liked Alan’s frank nature and his animated comments about the company and the industry. I have always found him to display a very deep knowledge about the industry and a strong passion for it.”

It was fairly rare in hi-tech circles for someone to lead an organisation through its entire development from infancy to maturity, and to keep many of the core senior team intact.

“Alan has led the organisation very well while having shareholders that often did not agree on major issues. This must have been extremely tough,” Kaplan says.

Former employee Nicholas Maweni, now the head of corporate affairs for rival operator Virgin Mobile, describes Knott-Craig as a visionary leader deserving national recognition for his exceptional contributions in fields including nation-building, business and the economy, science, medicine, technological motivation and community service.

Tomorrow the new CEO will be Pieter Uys, another 15-year Vodacom veteran who is now chief operating officer.

Uys is a solid, stable character with an infectious enthusiasm for technology and a clear vision of what needs doing next to drive further commercial growth.

Vodacom’s focus now is to play in every area of communications — a significant shift away from being a mobile-centric operator to providing communications infrastructure and services. That initiative was firmed up by the launch of Vodacom Business in February, driven by Uys to provide a wide range of services including data storage and protection as well as business software online.

Uys will also steer Vodacom through its ongoing R7,5bn black empowerment transformation and through a potential change of parent companies.

Telkom is debating whether to divest its 50% stake by selling 12,5% to Vodafone and distributing the remaining stake to its own shareholders.

There is no clarity yet on whether that will happen, but whatever the outcome, Knott-Craig is happy to let younger hands take the strain.

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