Cape Town - Telkom on Monday reported a stellar performance from its mobile business.
The unit has reduced losses from R2.2 billion three years ago to R43 million in the year to the end of March, and was now breaking even on a month-to-month basis.
Telkom's chief executive Sipho Maseko, describing the mobile unit as “a star performer”, said the company had completed its turnaround strategy and the business was now ready for growth.
The telecoms company recorded operating revenue of R37.3 billion, an increase of 13.9 percent from R32.8 billion, boosted by the acquisition of Business Connexion (BCX) and a solid performance in data.
Telkom said in a statement that the performance in mobile was partially offset by a 1.9 percent decline in voice and subscriptions revenue as the move from fixed lines to mobile continued. The company said it had been actively migrating some fixed line customers to “fixed-line look alike” services that used a mobile network as a way to move customers off copper lines to counter the continuing risk of copper cable theft.
Media analyst and tech commentator Arthur Goldstuck noted on Twitter what he called a dark cloud over the results, an “astonishing” churn rate of 55 percent on pre-paid mobile accounts, which he said meant they were “attracting but not keeping”.
The group reported profit of R2.4 billion, a 25.4 percent reduction on R3.2 billion recorded the previous year, mainly as a result of voluntary early retirement and severance package costs of R2.2 billion.
During the year, 3 878 employees accepted voluntary severance and early retirement packages, and a further 437 employees were affected by outsourcing.
“We have been mindful to retain talent and attract new talent, especially scarce and business critical skills,” Telkom said. The company recently hired eight interns through an online guerrilla marketing campaign that sought “to reward new ways of approaching business challenges”.
The campaign generated more than 38 000 hits in two months. “This is one way that Telkom sought a new perspective on hiring and to reward unconventional thinking, so the company took a chance with a new approach to talent acquisition,” the statement added.
The statement contained other comments suggesting the emergence of a lean, modern, customer-focused business from the old beast.
Telkom said it had progressed well with upgrading its complex legacy IT systems and had outsourced call centres to specialists with the aim of improving customer support services.
Also, the first phase of a large solar farm on Telkom's new campus in Centurion goes live in July. Once completed, 3mw of electricity will be generated from panels covering 1 800 carports. The project will also make charging points available for electric cars.
Telkom added: “The next phase of our head office energy project will include a 3mw tri-generation plant which would allow us to be self-sufficient in terms of our electricity requirements for our head office.”
Headline earnings per share for the year came in at 657.9 cents, 15.5 percent up on 569.7 cents recorded the year before. The board declared a dividend of 270 cents, a 10.2 percent increase on the previous year's total dividend.
AFRICAN NEWS AGENCY