Telkom CEO Sipho Maseko says that the group nearly ditched its under performing mobile arm.<\/p>\n
Maseko was speaking at the company’s headquarters on Monday (8 June) amid improved financial results that saw Telkom re-introduce a dividend for the first time since 2011, and echoes his comments in May last year that Telkom Mobile was not sustainable in its current format.<\/p>\n
\u201cOn the mobile side we experienced continued financial losses, and a standalone path is not sustainable going forward,\u201d Maseko told staff on 12 May 2014.<\/p>\n
However, Maseko said on Monday that the mobile business is very close to breakeven. “We were almost willing to throw in the towel – how do we derisk the mobile business,” he said.<\/p>\n
He said that he metrics are getting better – data revenue has improved, and subscribers have increased.<\/p>\n
“The management response has been pretty phenomenal.”<\/p>\n
Telkom and MTN South Africa remain in discussions regarding the potential extension of an existing roaming agreement, more than a year after the parties first came together.<\/p>\n
MTN signed an agreement with Telkom in March 2014, which would see it take over financial and operational responsibility for the rollout and operation of Telkom\u2019s radio access network (RAN).<\/p>\n
“The thesis has not changed,” Maseko said.\u00a0“There is obviously still a deal on the table…regarding MTN…a deal we are committed to with MTN.’<\/p>\n
“We’ve been able to encourage momentum and progress,’ Maseko said of the mobile arm’s performance.”<\/p>\n
“The transaction was never meant to save mobile – everything we do on top of this needs to support that,” the chief executive said.<\/p>\n
On Monday the group declared a dividend for the first time since 2011, after reporting a 60% rise in headline earnings per share for the year ended March 2015.<\/p>\n
Active mobile subscribers improved 21.2% to 2.187 million, from 1.8 million before, with post\u2010paid subscribers up 52% to 579,125.<\/p>\n
Mobile data revenue increased 50.6% to R988 million, the group said.<\/p>\n
Telkom highlighted a 19.5% rise in average revenue per user, to R75.05, from R62.79 before.<\/p>\n
Mobile voice and subscriber revenue increased 46% to R717 million, from R491 million before.<\/p>\n
Mobile capital expenditure decreased markedly, down 64.8% to R481 million, from R1.368 billion, ‘due to the shift to a more concentrated rollout in major metropolitan areas’.<\/p>\n
In November, David Shapiro, deputy chairman at Sasfin Securities forecast the death of Telkom Mobile.<\/p>\n
Speaking on Business Day TV, Shapiro said that mobile telecoms is simply too capital intensive for new operators to bring competition to the market.<\/p>\n
\u201cAnd certainly Telkom [Mobile] you can just write off. They [Telkom] have to consider other strategies.\u201d<\/p>\n
\u201cMy view is that you will not see Telkom [Mobile] or Cell C in a few years. It will only be Vodacom and MTN,\u201d Shapiro predicted.<\/p>\n
Telkom Mobile not sustainable: CEO<\/a><\/strong><\/p>\n Cell C and Telkom mobile won\u2019t survive: analyst<\/a><\/strong><\/p>\n Telkom wants to accelerate retrenchments<\/a><\/strong><\/p>\n