November 16, 2012 / 1:40 PM / 5 years ago

UPDATE 1-S.Africa's Telkom picks hotel executive as chairman

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JOHANNESBURG, Nov 16 (Reuters) - Telkom SA, South Africa’s struggling fixed-line operator, said on Friday it appointed a former gaming and hotel executive as its next chairman, following the abrupt departure of several board members.

Jabulane Mabuza, who was appointed to the board earlier this week, has been appointed as its chairman with immediate effect, Telkom said in a statement.

The former chief executive of Tsogo Sun Holdings, one of South Africa’s largest hotel and casino companies, Mabuza has been the chairman of the Casino Association of South Africa and of South African Tourism, a tourism promotion group.

As Telkom’s new chairman he will have to lead the search for the its next chief executive after its current head said this month she will step down in May.

The future of the state-controlled telecom, whose shares are down 45 percent this year, has been thrown into doubt by tentative government plans to renationalise it and force it to push through a costly expansion of rural internet access.

Stung by declining fixed-line usage and an expensive, failed attempt at expansion into Nigeria, Telkom has struggled to boost flagging earnings.

It has launched an expensive mobile phone unit that has struggled to win customers in a market dominated by Vodafone Plc unit Vodacom and MTN Group. The mobile business has yet to turn a profit two years after its launch. (Reporting by Ed Stoddard; editing by David Dolan)

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