Telkom comes under fire for excessive spending on consultants

South African state-owned mobile network giant Telkom has come under heavy criticism for its excessive expenditure on consulting services. The firm has recently parted with hefty sums on projects with Bain & Company and A.T.Kearney for two separate projects, the effects of which have eluded some media and other critics.

Telkom, a state-owned enterprise that is partially privatised, is among the four largest mobile services providers in the South African market, alongside the most recognised network MTN, as well as Vodacom and Cell C. The firm has been looking to consolidate its position in the rapidly growing telecom market recently, turning to consultants for support.

Bain & Company was brought on board late last year to support Telkom’s subsidiary BCX to cut costs and turn around its revenue strategy. The biggest source of criticism for the move was the fee in question – R200 million – which was further compounded by reports that the changes were ineffective.

Media reports described Bain’s interventions as severely lacking in effectiveness, while the CEO at BCX terminated the contract with Bain following its recommendations. Telkom, on the other hand, asserted that it benefited from Bain’s interventions and that the termination was for unrelated causes.

“As part of the agreement between BCX & Bain major changes in leadership at BCX would be a valid reason to terminate the agreements. Following a review of the organisational strategy, the leadership was comfortable that the organisation could leverage off the work produced by Bain to that point, as part of the revised strategic direction for the business” said Telkom spokesperson Noma Baku in an interview with MyBroadband.

Telkom came under further scrutiny after it appointed anagement consultancy A.T.Kearney recently, in a bid to improve overall operations at the firm. ‘A.T. Kearney consultancy has been brought on board, working side-by-side with our Telkom team,’ said the company in a statement.

Under the partnership, A.T.Kearney is expected to make improvements to Telkom’s existing strategies, as well as devise new ones. “his initiative is intended to assist ongoing efforts in the business and free up time for initiative owners to execute, while benefiting from cross-functional support and international expertise from the A.T. Kearney team,” said Telkom.