Telkom brushes off increased competition to dial up 58% revenue growth
CAPE TOWN – Telkom announced on Monday that its mobile services revenue had increased by 58.3 percent in the year to March, underpinned by the group’s broadband-led proposition.
The company said this was on the back of increased competition and the fact that technology changes continued to place the fixed business under pressure.
In a statement published on the Stock Exchange News Service the company said the significant growth in mobile service revenue was supported by 85.9 percent growth in active subscribers to 9.7 million. Despite adding 4.5 million subscribers, Telkom’s blended average revenue per user was stable at R100.
Telkom Group chief executive Sipho Maseko said in line with global trends, the company’s fixed business remained under pressure.
“With that in mind, investing in technologies to drive future revenue streams necessitates the evolution of the group’s skill base and acquiring various capabilities. Our human capital investment focuses on creating efficiency and effectiveness in the context of growing the business, achieving operational excellence, retaining key skills and ensuring our future competitiveness,” said Maseko.
The company’s operating revenue increased by 5.3 percent to R41.8 billion. Earnings before interest, taxes, depreciation and amortisation (Ebitda) increased by 8.5 percent to R11.3bn, which can be attributed to our ongoing sustainable cost management. The group Ebitda growth is faster than the revenue growth of 5.3 percent.
“Over the past six years, the contribution of our growth pillars grew significantly with mobile revenue contribution increasing from 3.2 percent to 25.7 percent, while information technology revenue grew from 0.9 percent to 16.2 percent. We continue to invest in the fibre ecosystem which is sustaining our fixed data revenue,” the group said.
Telkom said its capital investment of R7.7 billion – with a capital expenditure to revenue ratio of 18.4 percent – continued to underpin business growth. The ongoing investment enabled Telkom to grow new revenue in evolving technology, offsetting the traditional revenue shrinkage.
Telkom said it would continue to proactively invest in technologies and the network so that the group remains at the forefront of change.
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