Telkom reveals strong mobile growth

Telkom on Monday reported strong growth in its mobile business, with consumer revenue up 5.9%, driven by a 47.2% growth in mobile service revenue for the year ended March 2018.

The growth in the mobile business was supported by 30.2% growth to 5.2 million subscribers, with the blended average revenue per user (ARPU) increasing by 10.2% to R98, Telkom said.

Post-paid subscribers increased by 20.5%, adding more than 250,000 subscribers to reach 1.5 million subscribers. Telkom said that 30% of its post-paid subscribers have adopted the FreeMe product suite as their base plan, contributing to a 5.8% increase in post-paid ARPU to R192.

Pre-paid subscribers increased 34.6% to 3.7 million with the ARPU increasing by 21.4% to R60 benefiting from an expansion of its fixed wireless LTE smart offerings to the pre-paid segment.

“To achieve a quality of service network offering and to broaden our coverage domain, we rolled out 988 integrated sites in FY2018, such that we now have 3,974 sites, of which 2,333 were upgraded to LTE sites to further drive our wireless nomadic broadband product, SmartBroadband,” the operator said.

Group operating revenue was flat at R41.018 billion, while mobile service revenue up to R5.150 billion, Telkom said.

Mobile data was a major contributor to revenue with a 56.3% growth, supported by 124% growth in data usage.

Telkom said that the re-farming of its 1800 MHz spectrum is paying dividends with smartphone subscribers increasing by 43.95 to 2.8 million.

The group said its nomadic wireless LTE smart broadband offerings continue to do well with an increase of 194% in LTE subscribers to over 500,000, driven by its popular “deal of the month”, improved quality and the footprint expansion of its LTE network.

“I am pleased that the new generation revenue streams, such as mobile and data, are now compensating for the decline in the traditional business,” said chief executive officer, Sipho Maseko.

“We continue to invest in our network for future growth and invested R7.9 billion in capex, which is 19.3% of revenue, in line with our guidance. Mobile and fibre remain key capex focus areas, and we have strong returns – mobile service revenue grew by 47.2% and our active fibre to the home connectivity rate increased to 30.7% (FY2017: 18%) within three years of deployment, which is in line with international trends.”

  • Fibre capex amounted to R2.112 billion, down 11.7%;
  • Mobile capex amounted to R2.319 billion, up 19.8%.

Maseko said that investment in its last-mile access enabled Telkom to provide broadband of up to 200 megabits per second (Mbps).

“Based on this network foundation, we increased our minimum fixed-line broadband connectivity speed to 4 and 10 Mbps where applicable.

“We did this as part of our continuous drive to stimulate the digital economy and enable high-speed internet access. We have deployed more than 157,400 kilometres of fibre nationally, connecting over 2.5 million premises,” he said.

He added that capital investment across core and aggregation will enable the group to deploy one Tbps throughput within the next 18 to 24 months, “creating a futureproof network that is ready for exponential growth in data consumption”.

“Fibre deployment remains a key future enabler for end-user connections, as well as small cells in mobile networks,” Maseko said.


Read: Telkom full year profit slides despite mobile growth

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Telkom reveals strong mobile growth