[business day] Speculation that Cell C's turn- around artist Jeffrey Hedberg was being poached by Telkom have proven correct -- with Telkom giving him the tough task of reviving its floundering operations in Nigeria.
Hedberg was tipped to be joining Telkom back in March, when insiders hinted that he was being lined up to replace CEO Reuben September.
Instead Hedberg has taken on the possibly more difficult role of rescuing its haemorrhaging Nigerian network Multi-Links, which lost close to R2bn last year.
Telkom has made sorting out Multi-Links its top priority due to the huge damage it inflicted on the group's year-end results.
As well as the financial hit, the losses imply incompetence in Telkom's foreign investment endeavours at a time when African expansion is being touted as a key strategy for the future.
Telkom paid 280m for 75% of Multi-Links in 2007 and bought the remaining 25% for 130m in January. Last month September said that Multi-Links went wrong due to a price war, lack of skills, poor distribution channels, a 175% leap in operating expenses and too many low-spending customers.
"Turning Multi-Links around is Telkom's number one priority," he said.
The task now falls to Hedberg, with Telkom confirming him as the new CEO of Multi-Links yesterday.
Hedberg was appointed the CEO of Cell C in 2006 to overhaul the loss-making operator, and is widely credited with having achieved that. It is difficult to quantify his success as Cell C is still suffering losses, yet those are mostly inflicted by billions of rands in interest-bearing debts for which Hedberg cannot be blamed.
September said he was "elated" to bring Hedberg on board given his distinguished record for resuscitation. "Turning around Multi- Links' performance is vital to Telkom given the extent of the group's investment and the enormous opportunity the Nigerian market provides."
Hedberg would help Telkom capitalise on the lucrative opportunities Nigeria provided, and should make Multi-Links cash flow positive by 2011 or 2012, September said.
Telkom Appoints Cell C's Turnaround Expert to Head Nigerian Business
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