MTN vs Vodacom vs Telkom: how much are they really making?
South Africa’s largest telecoms giants have become some of the highest revenue-generating organisations in the country – but when it comes to bringing home the big bucks, mobile operators MTN and Vodacom have continued to excel, while fixed line incumbent, Telkom, has fallen to historic lows.
As predominantly mobile operators, MTN and Vodacom have ridden the wave of mobile growth in South Africa, while Telkom’s fixed-line business – which was once the main money-spinner for the telco – has dried up over the past 10 years.
Looking at the mobile operators, both have grown into market listing superpowers with revenues exceeding R69 billion (Vodacom) and R135 billion (MTN) – but each company has taken a different approach to market.
Vodacom profit vs revenue
While Vodacom remains the largest mobile network operator in South Africa, it’s closest local rival, MTN, has become an international giant, with 21 operations across Africa and the Middle East.
Vodacom has focused a great deal of its business in South Africa, constrained somewhat by its parent company, Vodafone, with only a handful of operations in Africa.
In its last full year reporting (ended March 2013), Vodacom reported revenues of R69.917 billion, and operating profits of R18.97 billion – giving the company a profit margin of 27.13%.
At the close of play on the JSE on Wednesday (16 October), Vodacom’s shares traded at a fraction of a percentage higher to R114.47, giving the company a market cap of R170.326 billion.
MTN profit vs revenue
In its last full year reporting (ended of December 2012), MTN reported revenues of R135.112 billion, and operating profits of R41.218 billion – giving the company a profit margin of 30.58%.
At the close of play on the JSE on Wednesday (16 October), MTN’s shares were trading 1.58% higher to R202.90, giving the company a market cap of R381.874 billion.
A look at the margins
Over the past decade, both MTN and Vodacom have seen continuous growth in revenue – and while both operators have seen operating profits flatten out, or even dip, over the course of the past decade, profit margins have remained in the double-digits.
According to data taken from financial reports from 2002 to 2013 (MTN: 2012), the average profit margin maintained by Vodacom Group over the past decade sits at 23.67% – with the network’s highest margin recorded in 2013 (27.13%).
MTN, on the other hand, saw its highest margins in 2005 to 2007 (31%), maintaining an average operating profit margin of 28.57% over the past decade.
Telkom profit vs revenue (After 2007 Telkom altered its reporting structure to “operating revenue” and retroactively changed the values accordingly)
Contrasting to the two mobile operators, incumbent fixed-line operator, Telkom, has seen its profit margins tighten over the past decade, as revenues slipped and profits evaporated amidst a rapidly declining fixed-line market.
After reaching peak profits in 2006 (with a margin of over 30%), Telkom has since seen its profits shrink – right to the point of its last financial year (2013), where it recorded a paltry R501 million in profit (margin of 1.54%).
At the close of play on the JSE on Wednesday (16 October), Telkom’s shares were trading 3.46% lower, down to R27.60, giving the company a market cap of R14.519 billion.
Telkom vs MTN vs Vodacom
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