Communications Minister Siphiwe Nyanda has refused to indicate whether some staff at state-owned entities SABC and broadband communication company Sentech are facing retrenchment. by Amukelani Chauke
Questions of possible retrenchments at the organisations arose yesterday when Nyanda announced the findings of the report compiled by the ministerial task team he appointed last year to look into ways of saving the entities further financial decline.
The task team, made up of industry experts, found that Sentech is losing money, and that it derived 74% of its revenue from the SABC.
While he said the report into these entities will not be made public, he said an urgent turn-around strategy was needed to save Sentech.
"The task team urges drastic and immediate action if Sentech is to avoid lapsing into terminal decline," Nyanda said.
He said the task team found that Sentech was "rudderless, inadequately funded and misdirected" and was not a sustainable business.
He said that Sentech's financial woes were caused by several factors, including "a new legal and regulatory regime" allowing competition and the absence of a clear ICT industry framework.
The team also found that declining profits and the demands of the digital environment would further erode profitability - and that migration to less expensive digital channels was a further threat.
Sentech reportedly budgeted for a net loss of R123-million for the 2009/10 financial year as a result of discontinued operations such as MyWireless.
"Sentech is in a financially thorny position because of the unprofitable products in its telecommunications suite," he said.
Addressing journalists yesterday, Nyanda said the task team, chaired by attorney Themba Langa, recommended, among other things, that Sentech discontinue all loss-making products and ventures and that leadership and governance be strengthened.
Meanwhile, Nyanda said operational obstacles at the SABC, which was granted a R1.4-billion bailout from the National Treasury late last year, have been overcome, but the state broadcaster was found to be "staff heavy" and that senior positions were held by people nearing their retirement age.
"The outcome of this process has led to action being taken against some employees of the corporation," he said.
