Telkom Mobile nears break-even point

Things are looking up for Telkom’s loss-making mobile phone business as the company on Friday reported stronger revenues.

For the quarter ended June 30, Telkom [JSE:TKG] said that its mobile net revenue was up 68.5% to approximately R350m.

Telkom Mobile still incurred a loss of approximately R30m during the quarter but the company noted that “this is an 87.9% improvement compared to the prior comparative period”.

The company further reported that its active mobile subscriber base has grown 11.7% in the quarter to just over 2.1 million subscribers.

Telkom Mobile’s blended average revenue per user (ARPU) also sits at R82.87 while its post-paid customers base grew by 61.9% and its prepaid base decreased by 1.3%.

During the quarter, Telkom made aggressive plays in the mobile market with tariff cuts and promotions on its LTE offerings.

“Our mobile business continues to grow and we remain confident of achieving break-even during this financial year,” said Telkom in its quarterly update.

In turn, Telkom’s mobile business is even helping to halt the effects of a slowing fixed-line market as its net revenue increased to R6.5bn.

“Net operating revenue has increased 1.7% compared to the comparative period as a result of the strong performance by mobile on data revenue and higher fixed-line subscription revenue,” Telkom said.

“This was partly offset by the continuing decline in fixed-line voice usage, due to mobile substitution, and leased line revenues, as a result of customers migrating to newer and cheaper technologies,” Telkom added.

Telkom reported that its fixed-line usage revenue had fallen 13.7%, largely as a result of a 5.3% decline in the number of voice lines to 3.394 million.

The telecoms company also said that it experienced at 14.5% decline in leased line and higher capacity connectivity revenue.

Among the bright spots in its fixed-line results, though, was a revenue increase of 9.2% for subscriptions and an increase of 6.3% in ADSL subscribers to 1 014 562.

Following the announcement of the quarterly results, Telkom’s share price was over 6% higher at the close of trade in Johannesburg on Friday as the share surpassed the R61 mark.

Fin24

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Telkom Mobile nears break-even point