In 2009 Telkom bought the remaining 25% of MultiLinks and had plans to spend billions of rand on expanding the business. Telkom spent north of R10bn in acquiring MultiLinks. This excludes the billions of rand it pumped into the business to expand its network. iWayAfrica was formed as the result of the amalgamation of Mweb Africa and Africa Online in 2007 when Mweb Africa was purchased by Telkom SA. iWay Africa provided satellite services aimed at the enterprise market in Africa.
MultiLinks, iWayAfrica and Africa Online proved to be poor investments for Telkom. Telkom fully impaired iWayAfrica and Africa Online before selling them in 2013, a few months after Sipho Maseko took over as CEO. The disposal was part of his strategy to turn around the then ailing business. MultiLinks was sold in October 2011 for $10m to Helios Towers Nigeria. MultiLinks cost Telkom over R7bn, including write-offs, with the disastrous venture blamed on the code division multiple access operator while the market was dominated by GSM technology, contracts that the company entered into that did not deliver the expected benefits and significant operating expenses.
MultiLinks made operating losses of R522m and R1bn in the financial years 2009 and 2010 respectively. In 2010 the Communications Workers Union submitted a dossier claiming widespread corruption at Telkom including its MultiLinks deal. It claimed at the time that MultiLinks entered into contracts that were strangling the company.
Mmmmm. What have Telkom got to hide.
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