Telkom revenues drop 0.7% despite 8ta mobile growth

Mergers, Acquisitions and Financial Results

South African telco Telkom has reported operating revenues of ZAR33.08 billion (USD3.92 billion) for the twelve months ended 31 March 2012, down 0.7% compared to the company’s full year revenues one year earlier. Telkom notes that its reporting segments consist of two separately managed business units; the ‘Fixed line’ segment provides fixed line access and data communications services, whilst the ‘Mobile’ segment accounts for mobile voice, data services and handsets sales through its ‘8ta’ unit. ‘Fixed line’ revenues decreased 2.8% year-on-year to ZAR30.64 billion year-on-year and ‘Mobile’ sales increased 1381.5% to ZAR1.2 billion as the service gained traction. Telkom’s results include a ZAR896 million loss relating to the disposal of ill-fated Nigerian venture Multi-Links, as well as an impairment charge of ZAR569 million, relating to iWayAfrica goodwill and assets.

In operational terms, fixed line telephony customers grew 4.6% to 819,019 as at 31 March, whilst Telkom’s ADSL broadband subscriber base increased 10.0% to 827,091. In addition, the operator reported 3,381 WiMAX subscribers, a 5.7% rise y-o-y. Meanwhile, Telkom’s mobile unit 8ta – which launched in October 2010 – has signed up 3.053 million subscribers since its launch, a 154.5% rise on an annualised basis. However, the number of ‘active’ subscribers at 31 March was less than half of that figure, 1.483 million (albeit up 213.2% y-o-y). TeleGeography notes that the latter figure refers to customers who have used an 8ta SIM card during the previous 90 days; three months is standard practice.

Telkom South Africa CEO Nombulelo Moholi commented: ‘Telkom faces many challenges at the moment but we will advance calmly, determined and focused on delivering on the promise of our business and strategy going forward. Group financial results for the year under review reflects our challenges but we took a number of significant steps towards securing a successful future for Telkom and we began casting the foundation that will allow the Group to compete well and build value in the future. It was a year of clean-up and consolidation across the Telkom Group. Our strategy going forward is clear and focused.’