Mobile plays the hero as Telkom sees fixed-line revenue decline

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Telkom has released its annual results for the last year and, was it not for mobile, it would have been a rather rough year.

Operating revenue for the year grew just 0.1 percent from R40.9 billion in the 2017 financial year to R41 billion in the 2018 financial year.

The yolk holding Telkom’s revenue back appears to be revenue gained from fixed line services. During this time the fixed line revenue fell from R24.3 billion in 2017 to R23.1 billion in 2018, a decline of 4.7 percent.

That isn’t just fixed line voice however. Telkom’s financials reveal that the number of fixed-line broadband subscribers fell 2.2 percent to 981 176 during the period.

Curiously, group expenditure on fibre declined from R2.3 billion to R2.1 billion in the period.

There is, however, good news to be found for Telkom and its shareholders.

“Telkom is shifting towards new revenue streams, such as mobile, data and the Internet of Things. These have already begun compensating for declining traditional business,” Telkom Group chief executive officer Sipho Maseko said in a statement.

Telkom’s mobile business has grown substantially. Revenue from mobile in the 2017 financial year was just R3.4 billion, last year that figure grew 47 percent to R5.1 billion.

This was clearly helped along by 30.2 percent more mobile subscribers joining Telkom in the last year.

The Telkom CEO recognises this change in how consumers are using the firm’s products and says Telkom is looking at ways to leverage services such as voice over internet protocol (VoIP) to improve revenue.

“We have strategies to manage the decline in voice revenue while we migrate customers to VoIP and grow new revenue streams through focused investment in areas of future potential growth,” said Maseko.

So while it was a bad year the group recognises it and appears to know where it can improve.


[Image – CC 0 Pixabay]

Brendyn Lotz

Brendyn Lotz

Brendyn Lotz writes news, reviews, and opinion pieces for Hypertext. His interests include SMEs, innovation on the African continent, cybersecurity, blockchain, games, geek culture and YouTube.