President Urges Telecom to Remain Tops in Competitive Market


By Petronella Sibeene WINDHOEK Emerging global market dynamics, fuelled by wireless and IP revolutions in the telecommunication industry, have negatively impacted on Telecom Namibia’s finances with a monthly loss in revenue of approximately N$371ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ 456. This revelation was made during a briefing of President Hifikepunye Pohamba by Telecom Managing Director, Frans Ndoroma, on the operations of the company. Pohamba, who undertook a familiarization tour of Telecom yesterday, urged the parastatal to manoeuvre its strategies and ensure that it remained tops in the competitive market. Telecom, wholly-owned by government, has in the past few years faced revenue loss in the market share given the erosion in the market. “There is reduced rate of revenue growth and decrease in margin”, he said. The Managing Director expressed concern about the situation, adding that if nothing is done, the consequences would be fatal. This includes Telecom being marginalized in the industry as well as loss of jobs in the long term. The company employs 1ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ 300 people with revenue standing at N$1-billion. The recommended strategy to remedy the situation is to extend business model to play along the ICT industry value chain through an aggressive development of required IT/IP, technical and commercial capabilities and next-generation infrastructure. Pohamba, who was impressed by operations at the parastatal, said the country could not be proud of itself if the communication infrastructure was bogus. He confirmed that in past years, communication was not easy, especially in rural areas. With increase in technology and through Telecom, Namibians in rural areas have access to telecommunications. The President stated that government is in support of Telecom’s initiatives regarding the application of ICT. He added that Telecom should advise him on how government could also contribute to the strengthening of such initiatives. Cognisant of the challenges that the company faces, Pohamba told the Managing Director and Board members to work hard and never resort to retrenchment as the answer to current problems. The President also confirmed that Telecom pays dividends to its stakeholder, the government. According to the Chairman of the Board of Directors, Titus Haimbili, Telecom has maintained a constant flow of dividends to its shareholder, which reflected a figure of N$8ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ million in 1995 and N$16ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ million in 2006. In total, since 1995 to date, the company has declared dividends to the shareholder amounting to N$182ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ 702ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ million. Eleven years ago, the company reflected an equity figure of N$257ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ 761ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ million which has now skyrocketed to N$702ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ 098ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ million. Telecom has invested N$203ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ billion in infrastructure since 1992. It has 208 VSAT terminals, 230 square kilometres of ultraphone coverage, 339 points of presence and 6ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ 028 kilometres of fibre routes. “The Board and Management of Telecom Namibia Limited conducts its business on the guiding principles of prudence and scientific excellence. “We believe that sound principles of corporate governance are an important key to Telecom Namibia’s success and its ability to secure the confidence of its shareholder, customers and employees. To this effect, we will continue to maintain a zero tolerance towards corruption,” he said. Haimbili further indicated that Telecom emerged from a difficult historic past with excellent financial results. The emerging global market dynamics, fuelled by the wireless and IP revolutions, demand that organizations such as Telecom Namibia Limited take pro-active steps to face fierce competition. Contrary to the popular perception, Telecom Namibia Limited is no longer a monopoly but a player in an ever-increasing competitive telecommunications industry where various players are also trying to make inroads into Telecom Namibia Limited’s mandatory arena. Based on that, he said the company’s approach to business in 2007 and beyond will not be radically different from what it has been over the years, driven by changing market conditions and technology.