Telkom interim revenue slides on political and economic uncertainty

Telkom SA on Friday reported a marginal decline (0.6%) in group interim operating revenue for the period ended September 2017, to R20.10 billion. Net operating revenue was down 0.9% to R15.79 billion.

Capital expenditure improved 9.2% to R3.97 billion, while headline earnings per share was down 7.4% to 303.9 cents per share.

Mobile service revenue climbed 43.2% to R2.28 billion, while data revenue was up 9.7% to R6.507 billion.

The board declared an interim dividend of 118 cents per share.

Group CEO, Sipho Maseko said that the first half of the year was characterised by a tough economic environment and increased competition. “We saw corporate businesses defer their spend on information, communication and technology (ICT) as a result of an uncertain political, economic and policy environment.

“Even though South Africa exited the technical recession in the second quarter of the year, business confidence remains very low, with a lack of appetite for investment by corporate businesses. Lower spend from government placed a further damper on ICT spend in the public sector.”

Maseko said that Telkom Group’s performance was negatively impacted by the challenging economic environment. BCX was mainly impacted as it is exposed to corporate businesses and the public sector which are both under pressure.

He said that  the mobile business growth trajectory continued in the period with strong growth in active customers and stable ARPUs resulting in an increase of 43.2% in mobile service revenue.

“The strong mobile growth which boosted group’s performance was underpinned by an expansion of our network, distribution and the launch of innovative products which were well received by our customers.”

Maseko said that Openserve continued its journey of transforming and modernising the network. “We expanded the fibre ecosystem with the purpose of stimulating the digital economy. Improved processes and efficiencies led to an increase in the connectivity rate of the homes passed. In the first half of the year, we connected more than 40% of homes passed while the active connectivity rate for the entire base is 24.5%.

“Openserve has brought prices down in the past 12 to 18 months with the recent 25% price reduction in IP Connect  in the first half of the year.”

Read: Government to form task team over sale of Telkom shares


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