Telkom points to mobile and fibre growth

Telecommunications group Telkom on Monday (7 February) reported a decline in revenue in a trading update for the quarter ended December 2021, despite a solid trading performance from its mobile business.

Group revenue for Q3 FY2022 declined by 2.3% year on year to R10.8 billion, however revenue in the mobile business and the masts and towers business (Swiftnet) grew 4.9% and 4.6% compared to Q3 FY2021. This was offset by the ongoing challenges in the IT business and the legacy fixed business, Telkom said.

“Our Q3 FY2022 legacy fixed business continues to decline, although the rate of decline has slowed down from double-digit decline, we saw in the prior year to 7.1%. In addition, the IT business remains challenged due to the lingering impact of Covid-19 and the global shortage of chips which led to BCX being unable to fulfill backorders for IT hardware in the first nine months of the financial year,” said group chief executive officer, Serame Taukobong.

Telkom said that BCX remains under pressure impacted by global supply challenges. Revenue for this side of the business declined by 3.6% to R3.8 billion.

Active mobile customers climbed 10% year on year to 16.4 million with a blended average revenue per user (ARPU) of R91.45, both prepaid and postpaid bases saw an increase in the period under review, the operator said.

Telkom said that mobile broadband continues to support growth. Mobile data traffic increased by 7.9% year on year to 246 petabytes, supporting mobile data revenue growth of 2.6% year on year to R3.13 billion. Mobile broadband customers grew 4.0% to 10.5 million.

Prepaid customers grew 12% year on year to 13.8 million, and postpaid ARPU grew 1.8% year on year to R215 with a marginal increase in postpaid customers to approximately 2.6 million. Prepaid ARPU declined by 16.1% to R67 compared to R80 reported in the prior year, as a result of the country slowly normalising following a reduction of Covid-19 restrictions, the group said.

Fibre growth

Telkom said that the number of homes passed with fibre grew 65.5% year on year to 801,084, while the number of homes connected with fibre grew by 38.6% to 358,528 representing an FTTH connectivity rate of 44.8%.

“Our wholesale business, Openserve, continued with its growth trajectory in the fibre market. In line with its strategy to accelerate the FTTH footprint while simultaneously focusing on connecting a home, Openserve grew homes passed with fibre by 65.5% year on year to 801,000,” said Taukobong.

While increasing the number of homes connected with fibre by 38.6% year on year, representing a connectivity rate of approximately 44.8%. The lower connectivity rate compared to the prior year reflects the lag between passing and connecting a home, he said.

“We continue to aggressively drive technology refresh to newer technologies, such as fibre and LTE as well as the utilisation of nascent 5G technology.” Capex investment of R2.02 billion for the financial year enabled improved capacity and coverage with 7,082 base stations now integrated, representing a 15.4% year on year increase in base stations, the group said.

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Telkom points to mobile and fibre growth