Telkom considers franchising shops - for efficiency

© Adam Gregor - Fotolia.com

It has embarked on a cost reduction programme that could see it shave off R5bn in costs in the next five years.

Telkom owns and operates most of its 137 stores with only 42 of them run by third parties. It is closing 8ta stores as it phases out the brand in favour of Telkom Mobile.

CEO Sipho Maseko said recently the group had been "inefficient" with regard to stores.

But that will change as the group is revamping its brand and has combined the consumer fixed-line retail business with the mobile business.

Stores will sell fixed-line and mobile products and services and broadcasting content when it becomes available.

Telkom has not decided whether to go the franchise route‚ but was investigating the option‚ Maseko said.

If it did adopt the model‚ it would probably retain and run some of the stores‚ he said.

Trade union Solidarity's spokesman‚ Marius Croucamp‚ said it was an industry trend to outsource mobile stores and "it remains to be seen if it saves any jobs".

A decision to franchise the stores could strengthen Telkom's rating on the black economic empowerment (BEE) programme of enterprise development.

It is reviewing its BEE programmes. Telkom's BEE equity partner‚ Elephant Consortium‚ exited the business four years ago after its investment reached maturity.

"The approach we are taking has to go beyond compliance‚" said Maseko. So‚ we are trying to think about it less as a compliance issue‚ but as a strategic issue.

"There are a whole lot of things we are thinking about in that space. Whether in the area of enterprise development‚" he said.

Telkom would hold discussions with its big three suppliers about the role they could play in empowerment programmes.

"We really want to find something that is impactful in our society.

"So‚ we will probably be slow to be fast in that area of BEE and transformation because we need to think about it deeply‚" said Maseko.