Telkom takes a hit as its fixed-line business drags

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Telkom’s earnings took a hit in the six months ending September 2022, as customers turn away from fixed-lines and embrace new technologies.

Telecommunications group Telkom has published its interim results for the six months ending 30 September 2022, showing a big hit to headline earnings over the period.

The lower group EBITDA – and the constrained EBITDA margin at 23.4% – was attributable to a 31.4% increase in the cost of handsets, equipment, software and directories, following higher mobile handset sales of 19.7% and the increase of 73.1% in IT hardware and software revenue, it said. “However, growth was impacted by customer recharges returning to pre-Covid-19 levels. We continued to pursue our migration strategy and continued to manage the transition from old to new technologies. However, this migration impacted our revenue growth and overall profitability.”The mobile business continued to drive growth in Telkom Consumer. Total mobile revenue grew marginally by 0.5% as the product mix evolved towards longer post-paid contracts.

Openserve struggled, with revenue declining 4.3% over the period, despite 10.8% growth in its ‘next generation’ revenue which comprises high-capacity links and fibre.

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