More Africa NewsTelkom’s mobile growth slows ‘in tough quarter’

February 7, 2022by myles0

Telkom said it grew its mobile base by just 10% year on year in the third quarter of its financial year to 16.4 million – the prepaid base climbed by 12% and post-paid by 1.8%.

That represents a marked slowdown in customer acquisitions in the key holiday quarter ended 31 December 2021. In the six-month period ended 30 September, Telkom had reported an 18.3% year-on-year expansion in its active mobile subscriber base, suggesting a steep deceleration into the final quarter of the calendar year.

Mobile broadband customers rose by 4%, also a sharp slowing from the 10.3% year-on-year growth rate in the reporting period ended in September.

Telkom described the market as intensely competitive.

“Given the challenging macroeconomic environment, post-paid consumers are becoming more cost-savvy and are continuously searching for ways to manage and reduce their spend, resulting in real growth only emanating from the prepaid market,” the company said.

“Despite the challenging environment, our post-paid customer base was relatively flat at 2.6 million, with post-paid Arpu (average revenue per user) up 1.8% year on year to R215. The prepaid market remains the driver of new connections; prepaid customers grew by 12% to 13.8 million.”

However, prepaid Arpu slumped by 16.1% from R80 a year ago. Telkom blamed a normalisation in spend following Covid-19 lockdowns for reduced demand from prepaid users.

Mobile data traffic increased by 7.9% year on year to 246 petabytes, supporting mobile data revenue growth of 2.6% to R3.1-billion.

Fibre flying

It was a better picture in fibre broadband, where Telkom reported a 38.6% jump in the number of homes connected to 358 528, representing a connectivity rate of 44.8% (the percentage of homes taking up the fibre service where it is available). The number of homes passed by fibre grew by 65.5% to 801 084.

On the financials, group Ebitda – a measure of operating profit – rose by 5.4% to R2.9-billion, with Ebitda margin expanding by 1.9 percentage points to 26.7%. Total expenses were reduced by 4.9%, with operating expenses declining by 7.7%. The cost-to-serve ratio in the mobile business was optimised from 30.9% in the prior year to 26.9%. However, on a normalised basis, group Ebitda declined by 1.4% as cost savings were not sufficient to offset a decline of 2.3% in group revenue.

“Notwithstanding the operational performance, our group revenue was under pressure in the third quarter of the 2022 financial year,” Telkom CEO Serame Taukobong said.

IT services business BCX continues to perform poorly. Revenue declined by 3.6% due to “global supply challenges”.

“Global challenges, such as the global chip shortage and shipping delays, exacerbated backlogs and offset any relief from the waning Covid-19 conditions. After the likely slight rebound in GDP for 2021, we cautiously anticipate that our stable corporate client base will review ICT projects that were previously delayed due to the pandemic,” Telkom said. 

Source: Tech Central

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