How successful has Telkom’s FreeMe been?

STABILISING REVENUE: FREEME DRIVING SUBSCRIBER GROWTH IN CONTRACT BASE.

Group cut its electricity consumption by close to 10% in the year.

In its annual report published yesterday, Telkom said of its post-paid subscribers, 13% use its FreeMe data-focused contract packages, of which 79% are new customers. FreeMe was launched in July 2016. FreeMe Family, allowing for a single plan to be shared among multiple users, was launched in February 2017.

The total number of post-paid subscribers at March 31 this year was 1.227 million, of a total 3.999 million mobile base. This means just shy of 160 000 (contract) customers are on FreeMe. This in itself isn’t a significant amount, but the fact that eight of every 10 new customers are new to the operator is critical –126 000 post-paid subscribers are new to the network since FreeMe launched. This equates to nearly 40% of the 433 000 new contract customers added in the year. The bulk of the remainder are surely on its data-only SIM contracts.

FreeMe’s driving subscriber growth in Telkom’s contract base, and helping stabilise average revenue per user (ARPU). The group says post-paid “ARPU of R181 [was] supported by FreeMe”. This is flat from the previous year (R181.41 vs R181.69), which gives some idea of how the data-only-plus-dongle contracts are driving down ARPU in that base.

Headcount still being managed down

When Sipho Maseko took over as CEO in April 2013, Telkom had 21 209 employees. Group headcount has been on a steady downward path, with the total in the Telkom company now at 10 743. This is 22% lower than the prior year, but was impacted by the transfer of 1 180 employees (from enterprise and data centre units) to BCX. Without this, however, there was still a 13% drop. Telkom says this is due to the effect of the voluntary early retirement packages and voluntary severance packages offered. Total group headcount decreased from 20 341 to 18 847.

Big electricity consumption cut

The group cut its electricity consumption close to 10% in the year, to 619.3 million kWh. This is a significant decrease (FY 2015: 677.5 million kWh).

Telkom primarily a ributes its 9% carbon emission decrease from the prior year to:

50 smart meters measuring electricity consumption in key buildings;

rolling out the energy-efficient light-emitting diode (LED) lighting initiative which replaced conventional lighting systems in 900 buildings; and

implementing a building management system at the campus. It monitors and controls multiple facilities elements, including air conditioning, power distribution, lighting and water usage.

In the year, a 3Mw grid-tied solar photo-voltaic plant at its head office campus, became fully operational. Since then, the R88-million plant’s generated 3 708 Mwh, equating to 90% of daytime energy demand on campus (excluding data centre).

Fixed-line now less than a third of the business

The Telkom fixed-line business is now 28% (R8.974 billion) of the group’s total net operating revenue. BCX is nearly double the size, at R16.559 billion. Its mobile unit generated R2.004 billion in revenue in full-year 2017, while the wholesale division (Openserve) booked R3.819 billion (from external customers).

Hilton Tarrant works at immedia.