SABC, SENTECH IN TROUBLE
COMMUNICATIONS Minister Siphiwe Nyanda has refused to indicate whether state-owned entities SABC and Sentech are faced with retrenchments.
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 from further financial decline.
The task team found that Sentech is losing money and that it derived 74percent of its revenue from the SABC.
While he said the 93-page report into these entities will not be made public, he said an urgent turnaround strategy was needed to save Sentech.
Nyanda 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 and a misaligned business strategy in support of the national delivery agenda.
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 R123million for the 2009-10 financial year as a result of discontinued operations such as MyWireless.
Nyanda said the task team, chaired by 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 R1,4billion 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 task team advised the minister that the SABC's recruitment strategy should focus on developing and grooming young talent to prepare them for leadership positions," he said.
Nyanda said the SABC would not survive without government bailouts. He said the task team had provided assistance to the interim board and the auditor-general's forensic investigation.