Telkom’s profits fall as it focuses on subscriber growth
SA’s third-biggest mobile operator, Telkom has a reported a double-digit fall in core profit in its third quarter to end-December, hit by higher costs as well as load-shedding, but also weaker margins as it kept a focus on growing its mobile subscriber base.
Group revenue rose 2.3 per cent to R11.03 billion to end-December, Telkom said yesterday, while earnings before interest, taxation, depreciation and amortisation Ebitda fell 13.5 per cent to about R2.5 billion.
The group also warned of declining profitability for its fourth quarter, in part due to the costs of growing its mobile subscriber base, where the costs of handsets are up felt upfront.
Telkom said it had focused on ‘offering attractive value propositions’ in its mobile business, with mobile data traffic up 25.6 per cent and subscribers 12.9 per cent to 18.6 million. Mobile broadband customers grew 9.9 per cent to 11.5 million, comprising almost 62 per cent of active mobile customers.
“Our mobile and broadband strategies continued bearing fruit,” said CEO Serame Taukobong.
“We saw good growth in broadband as our data-led and connect-led strategies continued to drive growth in mobile and fibre subscribers along with data usage,” he said.
The group also flagged the costs of load-shedding, saying while its mobile sites are partially backed up through battery power, access network availability is materially reduced during load-shedding Stage 4 and beyond.
This increased roaming costs, although the group said it had network availability of 99.99 per cent during load-shedding as it has resilient backup power, which consequently increased spend on diesel fuel to ensure network availability.
Telkom also said yesterday it remains focused on commercialising its masts and towers portfolio, that amounted to 3 960 towers at the end of the quarter, and is expecting to receive offers in March.