{"id":510792,"date":"2021-08-04T08:39:32","date_gmt":"2021-08-04T06:39:32","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=510792"},"modified":"2021-08-04T08:39:32","modified_gmt":"2021-08-04T06:39:32","slug":"telkom-reports-strong-mobile-and-fibre-growth","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/mobile\/510792\/telkom-reports-strong-mobile-and-fibre-growth\/","title":{"rendered":"Telkom reports strong mobile and fibre growth"},"content":{"rendered":"

Telkom says that active mobile customers on its network increased 36.3% year on year to 16.1 million.<\/p>\n

It said in a trading update for the quarter ended June 2021, that mobile data revenue grew 11.1% supported by growth in mobile broadband customers – up 30.9% to 10.5 million, representing 65.6% of active customers.<\/p>\n

Group revenue was up 3.5% year on year to R10.62 billion, mainly driven by the mobile business. Fibre to the home grew by 32.2% to 306,837 homes, representing an FTTH connectivity rate of 50.1%, it said.<\/p>\n

Mobile service revenue grew 13% to R4.44 billion. Telkom said its postpaid customer base was relatively flat compared to the prior year at 2.6 million with postpaid ARPU up 3.8% year on year to R221.<\/p>\n

The prepaid market remains the driver of new connections. Prepaid customers grew by 46.8% to 13.5 million. In the quarter under review, 744,485 prepaid net additions were recorded.<\/p>\n

Prepaid ARPU declined by 15.3% to R68 compared to R80 reported in the prior year due to the significant slowdown in working from home and online schooling, Telkom said.<\/p>\n

Mobile data revenue grew by 11.1% to R3.2 billion, supported by a 30.9% growth in mobile broadband customers to 10.5 million, which represents more than 65% of the group’s active customer base.<\/p>\n

Capex of R534 million was invested in coverage, with 6,646 base stations to date. This reflects an 8.8% year on year increase in base stations, it said.<\/p>\n

Group chief executive officer, Sipho Maseko, said: \u201cTelkom published a solid set of results for the first quarter of the year in a challenging trading and economic environment. Group revenue and EBITDA grew 3.5% and 7.3% respectively, demonstrating recovery in topline revenue and strong profitability compared to the prior year.<\/p>\n

“Our sustainable cost management continues to deliver positive results, culminating in Group EBITDA growing faster than revenue despite a salary increase of an average of 6.0% across the group.”<\/p>\n

He said that despite the South African economy gradually opening, customers remain under severe financial pressure due to loss of jobs, reduced income and liquidation of small businesses.<\/p>\n

“We witnessed a continuing change in consumer behaviour in the postpaid consumer market. As customers seek to manage their spend, we saw a reluctance to renew postpaid contracts with some customers opting to switch from postpaid to prepaid propositions.”<\/p>\n

In the Enterprise segment, investment lags the economy as the country grapples with the Covid-19 third wave with many Small and Medium Entities (SMEs) having to close their businesses in these challenging times.<\/p>\n

“What has been encouraging is the Mobile business sustaining its growth trajectory despite a very strong prior year first quarter, with postpaid ARPU holding steady at around R220,” said Maseko.<\/p>\n

Telkom said its consumer business revenue grew 8.3% to R6.52 billion driven by growth in mobile revenue. “This was partially offset by the decline in fixed-line business due to continued migration to next-generation technologies such as LTE and fibre and ongoing pressure in the SME segment.”<\/p>\n

BCX under pressure due to a weak economy<\/strong><\/p>\n

The South African economy continues to be under pressure due to the impact of Covid-19, the group said. BCX, which serves all the sectors of the economy, has performed in direct correlation with decreased South African GDP growth.<\/p>\n

“We continue to see sluggish IT spend and investments by corporates as the country battles with the impact of Covid-19 and the effects of restrictions on parts of the economy due to lockdowns.”<\/p>\n

BCX results reflect the challenging environment with its revenue down 4.9% to R3.8 billion.<\/p>\n

The IT business is hardest hit by the challenging environment with revenue down 11.8% to R1.8 billion due to delayed investment in IT by enterprise customers, Telkom said. No significant churn was observed from existing customers.<\/p>\n

Openserve on a recovery path<\/strong><\/p>\n

Revenue of R3.3 billion was only R48 million – or 1.4% – lower than the prior year, Telkom said. This small decline indicates a recovery in Openserve\u2019s revenue, following the four previous successive years of a significant decline in revenue.<\/p>\n

“This is attributable to growth in high capacity links for carriers, an increase in demand for fibre services and a slowdown in fixed voice churn, which has a much smaller proportionate impact than prior years,” it said.<\/p>\n

Fibre rollout<\/strong><\/p>\n

“Significant strides were made in the fibre business, increasing the number of homes passed by 34.3% to 612,451 following fibre rollout and supply chain challenges from the international lockdown in the prior year,” Telkom said.<\/p>\n

The number of homes connected with fibre increased by 32.2% to 306,837 representing a fibre connectivity rate of 50.1% which remains the highest in the market, the group said.<\/p>\n

“We have reached an inflection point, where the number of homes connected with fibre of 306,837 surpassed the number of homes connected with copper of 264,186.<\/p>\n

“Despite the decline in the overall fixed broadband numbers, we have seen an increase in usage with fixed broadband traffic up 4.4%. More than 60% of our broadband customer base utilise speeds exceeding 10 Mbps,” it said.\"\"<\/a><\/p>\n

\n

Read: Telkom chief executive Sipho Maseko to step down<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Telkom said in a trading update for the quarter ended June 2021, that active mobile customers on its network increased 36.3% year on year to 16.1 million.<\/p>\n","protected":false},"author":10,"featured_media":445502,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[26,65],"class_list":["post-510792","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mobile","tag-headline","tag-telkom"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/510792","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=510792"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/510792\/revisions"}],"predecessor-version":[{"id":510810,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/510792\/revisions\/510810"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/445502"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=510792"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=510792"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=510792"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}