Telkom, whose subsidiaries include Openserve and Business Connexion, recorded a 13 percent growth in mobile service revenue during the quarter to R4.4 billion on the back of a 36.3 percent year-on-year growth in active customers to 16.1 million. File picture: African News Agency (ANA)
Telkom, whose subsidiaries include Openserve and Business Connexion, recorded a 13 percent growth in mobile service revenue during the quarter to R4.4 billion on the back of a 36.3 percent year-on-year growth in active customers to 16.1 million. File picture: African News Agency (ANA)

Telkom adds more mobile, fibre to home customers as demand soars

By Dineo Faku Time of article published Aug 5, 2021

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SOUTH Africa’s third-biggest telecoms company, Telkom, was awash with mobile and fibre to home customers for the quarter to the end of June, despite the continued decline in the fixed-voice and postpaid segments.

Telkom, whose subsidiaries include Openserve and Business Connexion, recorded a 13 percent growth in mobile service revenue during the quarter to R4.4 billion on the back of a 36.3 percent year-on-year growth in active customers to 16.1 million. Increasing demand saw a 32.2 percent jump in the number of customers connected, with fibre increasing to 306 837, representing a fibre connectivity rate of 50.1 percent, which remained the highest in the market, Telkom said.

Chief executive Sipho Maseko said that despite the economy gradually opening, customers remained under severe financial pressure, because of the loss of jobs, reduced incomes and the liquidation of small businesses.

“We witnessed a continuing change in consumer behaviour in the postpaid consumer market. As customers seek to manage their spend, we saw a reluctance to renew postpaid contracts, with some customers opting to switch from postpaid to prepaid propositions,” Maseko said. He said the postpaid customer base was relatively flat compared to the prior year, at 2.6 million, with postpaid average revenue per user up 3.8 percent yearon-year to R221.

“The prepaid market remains the driver of new connections. Prepaid customers grew by 46.8 percent to 13.5 million. In the quarter under review, 744 485 prepaid net additions clients during the quarter ended June 2021,” said Maseko. He said while the fixed business had declined by 5.6 percent during the quarter, there was a significant slowdown in the rate of decline. Fixed-voice revenue declined by 13.6 percent year-on-year.

“This compares favourably to the 33.5 percent decline reported in the prior year. Fixed-data connectivity revenue grew by 1.2 percent year-on- year, compared to the decline of 15.6 percent reported in the prior year,” Maseko said.

Telkom became South Africa’s third-largest telecoms company after overtaking Cell C last year.

Africa Analysis’s director for pricing research, Ofentse Dazela, said despite the difficult lockdown environment in which telecoms companies continued to operate, which was characterised by poor economic growth, businesses discontinuing operations, job losses and, recently, civil unrest, Telkom continued to show resilience. Telkom was maintaining a healthy growth trajectory, when looking at various aspects such as fibre network roll-out activities, housed already connected, and the growing number of mobile and fixed LTE customers.

“While Telkom may have lost a small portion of its postpaid market partly due to growing competition from competitors, it has seemingly compensated for this market share loss with 44 485 prepaid net additions that were recorded during the quarter under review,” Dazela said.

Telkom’s shares closed 0.84 percent higher at R42.21 on the JSE yesterday.

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BUSINESS REPORT ONLINE

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