South Africa’s telecommunications company Telkom has reported positive results driven by growth in mobile data. The Group announced that mobile data was a major contributor to revenue with almost sixty percent growth.
Despite tough trading conditions, competition, policy and political uncertainty experienced last year the company’s operating revenue was up R41 million. The Group released its annual results for the year ended 31 March 2018 in Johannesburg this week.
Telkom CEO Sipho Maseko told investors and stakeholders he was happy with the current results. Revenue remained flat for the reported period despite an increase in mobile service revenue especially data led prepositions.
Telkom reported a decline in fixed voice revenue however subscribers went up 30 percent while the Group added 200 000 new pre-paid wireless customers.
“And really what has been a big growth for the group is the growth of the mobile market. Subscribers went up 30 % largely indexed between both prepaid and post-paid. Post-paid increased by about 20% adding more than R250 000 post -paid subscribers. On the broad band side we have also seen phenomenal growth, the smart phone users 2.7 million of those. The role that data is beginning to play in the future that will pay off.”
The company says it will continue to aggressively invest in its wireless business while lowering prices for the consumer. It will also be replacing its traditional copper based infrastructure with new technology.
“What we call high speed broad band customers grew 36 % to 1.2 million and that will increasingly become a lense through which we look for broad band growth so a lot more emphasis on VDSL, LTE and fibre. It’s a desire of mine to get the entry level speed across our broadband technologies to be 10mb per second. We are seeing the benefits of investing in new technology and our new revenue streams are beginning to demonstrate the paying off of that investment. Very aggressive growth in the mobile business, strong growth in fibre and what we call eco systems and number three growth in future revenue products.”
The Group the regulatory environment is getting tougher for business. “The competition commission and ICASA launched investigation around the efficiency of the market, data pricing and all of those issues played themselves into the context. Of last year’s performance, there has also been uncertainty over the ICT white paper. What it means is that there has been a lot of assertions there and we had to respond to that in a way that enables us to get through the year.”
“The new world that we are operating in has many challenges and these included serious competitiveness combined with economic changes, operating changes and we had to adapt to this,” says Telkom Chief Financial Officer Deon Fredricks
ICT journalist at Techcentral, Duncan McLeod says, “I think the story is really about the strong growth in mobile driven by aggressively priced plans and clearly they are winning market share both on pre and post-paid but I think a big area of concern in the numbers from BCX, is the second set of numbers where the BCX has been quite poor and turning BCX is going to be a priority for the management team.”
McLeod says Telkom needs to catch up with spectrum. “They can make up for that with the fact that they have a larger amount of spectrum in higher frequency and doing away with two G on their network, they are in a strong position, their rivals can’t do that and by re firming their two G spectrum for broadband services will put them in a stronger competitive position and we all know that is in data services because voice is a declining business.”
Telkom decentralised its business model a few years back to sharpen efficiency within the Group. The company will also be re branding its yellow pages. It says it will focus on stabilising the business; take costs out as they migrate to more digital platforms.
