Telkom flagged an increase in revenue for the quarter that ended June 30, 2023, despite challenging economic conditions prevailing in South Africa, including load shedding.
In its trading update, the mobile operator said yesterday that its group revenue was up 3.8% to R10.7 billion, boosted by data and fibre interest. However, core profit decreased by 4.2% to R2.2bn.
Telkom reported that mobile revenue was up 5.2% to R5.5bn while mobile service revenue increased by 6.5%, and mobile data revenue rose by 9.9%.
The group said Telkom's trading update for the quarter, which ended June 30, 2023, demonstrated good performance by new generation network (NGN) offerings despite challenging economic conditions prevailing in South Africa.
Telkom Group CEO Serame Taukobong Taukobong said: ‘’Telkom has started the 2024 financial year with good momentum. Group performance was pleasing in the face of rolling power outages, muted economic growth, continuing inflationary pressures on consumers and an intensely competitive landscape.“
He said the ongoing instability of electricity supply in South Africa saw accelerated load shedding (stages 4-6) continuing into financial year 2024, while the comparative period (Q1 FY2023) was largely at Stages 1-2.
‘’The cost of load shedding has now largely been incorporated in our operating cost base, but will continue to impact group profitability. To this end, Telkom is investing in capital expenditure to improve our mobile and fibre networks' resilience, as well as reduce diesel consumption by installing and upgrading to lithium batteries along with reconfiguring our sites for batteries to become the primary backup system,“ he said.
Telkom was also increasing its solar power footprint at key properties/sites to reduce the impact of power outages caused by load shedding.
Taukobong said: ‘’We are pleased that cost savings from our recent labour restructuring process offset the impact of load shedding, as planned, but the legacy revenue declines weighed down on overall group profitability.’’
Telkom’s fibre business, Openserve, continued accelerating its leadership in providing connectivity across South Africa
Fixed data next-generation network revenue increased by 10.6%. Openserve grew its homes passed base by 24.4% to 1.1 million homes. but was still feeling pressure from an accelerated decline in fixed-voice services, which were down 29% year on year.
The group said its ICT services business BCX was healthy as the fulfilment of orders improved along with new orders. Performance was, however, impacted by legacy and fixed voice revenue declines caused by ongoing migration to NGN technologies across our businesses, as anticipated. BCX's revenue grew by almost 3% to R3.5 billion.
Swfitnet, which manages its portfolio of more than 4000 masts and towers, grew revenue by 1.2% to R326 million, with core profit up 1.7%.
‘’The group will continue improving its cost base to improve profitability in the medium term,’’ Taukobong said.