Telkom reports big growth in mobile, but revenue stalls
Telkom said it lifted its mobile subscriber base by 22%, in a quarterly trading update for the third quarter ended December 2015.
Active mobile subscribers grew to 2,565,793, with a blended ARPU of R90.26, the operator said.
Telkom said that its mobile business continued to achieve good growth with services revenue up 37% and data revenue up 56% year on year.
“Our initial expectation that the mobile business would break even by March 2016, has been tempered by the operating environment and cost pressures. We are however confident that we will maintain the current positive revenue growth witnessed in this part of our business.”
Group net revenue for the three months ended December 2015, advanced 7% to R7.25 billion, while group operating expenses grew 13% R4.7 billion
Group capital expenditure of R1.5 billion for the quarter was up 22%.
Telkom said that fixed voice revenue of R3.6 billion, was down 5%, however, mobile data revenue of R417 million, was up 56%.
The Competition Tribunal of South Africa approved a R2.6 billion merger deal between Business Connexion Group and Telkom, in the second half of last year.
BCX employs approximately 6,700 people in Africa and generates revenue in excess of R6 billion per annum.
Excluding BCX’s operations, Telkom said that group net revenue R6.76 billion was down 0.3%.
“Excluding BCX, our operating expenses remained flat as we benefited from our multiyear
transformation initiatives. We also made progress on the sale of non-core assets during the quarter.”
Telkom said that the economic and operating environment has deteriorated driven by lower commodity prices and a weakening rand.
It said that the outlook remains challenging on the back of lower growth expectations, higher interest rates and rising inflation. “Against this backdrop, we prioritised our capital expenditure programme to focus on the growth areas of fibre and LTE,” the group said.
Features:
- Fibre to the curb (FTTC): 1.25 million homes passed with fibre;
- Fibre to the home(FTTH): 56,000 homes passed;
- LTE sites grew 9% to approximately 1,400 sites;
- ADSL subscribers increased 3% to 1,018,107;
- Fixed data revenue excluding leased line revenue increased 5%;
- Postpaid subscribers grew 45% while prepaid subscribers increased by 15%.
Telkom said that it extended its debt maturity profile by raising a R1 billion term loan.
“We expect continued weakness in the economy and anticipate that our customers will migrate to cheaper packages or delay spending on new infrastructure.
“We will partner with our customers to contain costs as well take up any opportunities presented by the current environment to grow our business,” Telkom said.
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