Mobile magic spurs Telkom progress

Telecommunications giant and South Africa’s biggest fixed-line telephone group Telkom delivered pleasing results for the past financial year, including a rise in headline earnings by 12,4% that saw its shares jump by more than five percent immediately after the presentation in Midrand on Monday.

Group revenue rose by 9,8% to R41 billion and the firm declared a final dividend of R2.91, taking the total for the year to R4.22, up from R2.70 in the previous year. The positive results were driven largely by the integration of the group's cloud computing operation BCX and the invigorating performance of its mobile business.

"We made significant strides in a difficult operating environment characterised by regulatory uncertainty, increased competition and a weak economic environment," Telkom CEO Sipho Maseko said.

"We accelerated our capital investment, focusing on fibre roll-out and our mobile business. We have now created the implementation capability to support strategic growth areas."

Telkom Mobile remained the group's golden goose, growing its active subscriber base grew by almost 48% over the last year, to almost 4 million customers and delivering service revenue growth of 38.4% to almost R3.5 billion. The mobile division recorded EBITDA of R660 million after four years of losses.

"This was a result of an expansion in our network, extension of our distribution channels and the launch of innovative products," said Maseko.

Telkom Mobile's competitive Free Me and Free Me Family data offering, which which price comparison platform Tarifica named as the most popular choice among high data and voice users in the country, are vital cogs in the juggernaut.

BCX was consolidated for the full year compared to seven months' revenue in the prior year. According to Telkom, BCX remains a key growth platform for the group and the company now has a singular sales team, a unified go-to-market strategy and a single brand.

"With the completion of the integration of our enterprise business with BCX, BCX has now increased its scale and scope of products, services and business solutions. BCX remains a growth platform through which cloud computing, data analytics and Internet of Things, among others, will be delivered," said Maseko.

It has also accelerated its capital investment, focusing on fibre and mobile business.

Telecommunications and Postal Services Minister Siyabonga Cwele said Telkom's robust financial results affirmed the government's decision not to fully privatise the company, going against calls by opposition parties for it to do so. The government has 38% stake in Telkom.