Telkom’s comeback as a major cellular network operator is paying off, with growth in mobile revenue more than making up for an ongoing decline in fixed-line income. So much so, that the money it makes from next-generation technologies has overtaken other sources of income.
“Allocating capital to a data-led and fibre-enabled mobile network – a growth area of our business – successfully prepared us for the significant increase in data demand and mobile broadband services as more people worked, did business and studied from home,” CEO Sipho Maseko said. “It’s difficult to split out any impact that data price reductions at competitors may have had on Telkom mobile, given that the slower growth in the second half was actually driven more by slower voice and subscription revenue growth while mobile data revenue continued to grow at about 30%,” Takaendesa said.
Yep!, which focuses on small and medium businesses, was negatively affected by the responses to Covid-19, although Maseko said the unit had seen good progress. Its e-business platform had an early uptake of 98,521 monthly business customers on average. Group revenue for the year to end-March rose 0.4% to R43.2-billion, despite what it says was a challenging environment. Earnings before interest, tax, depreciation and amortisation , a measure of operating performance, increased by 12% to R12-billion as its profit margins improved. It credited the growth to its mobile business. Basic earnings per share came in 90% higher, while headline EPS gained 53%.
“The management team has made great progress with its turnaround plans which started in 2013, and the group has now reached an inflection point where new revenue streams are large enough to more than offset the decline in legacy businesses,” Takaendesa said.