Telkom’s mobile business is booming, fixed-line is dying slowly

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Following the launch of TelkomONE on Monday, the network operator has announced its interim financial results for the six month period ending September 2020.

As we eluded to in the headline, Telkom’s mobile business is doing incredibly well.

Over the six month period, Telkom grew mobile service revenue from R5.6 billion in September 2019 to R8.28 billion in September 2020.

This was thanks to Telkom adding 19 percent more subscribers compared to last years figures. Telkom now boasts 13.68 million mobile subscribers.

“The Mobile business performed exceptionally well, despite the national lockdown negatively impacting distribution channels. The Mobile business sustained its growth trajectory into the first half of the year, growing service revenue by 47.8 percent to R8 282 million placing us solidly as the third largest mobile operator in South Africa. Our mobile broadband strategy continued to pay off and benefited from the increased data demand due to people working from home during the pandemic with mobile data revenue increasing by 53.8 percent,” Telkom Group chief executive officer Sipho Maseko said in a statement.

But fixed line services are becoming an obstacle for Telkom.

Fixed broadband subscribers are down 18.4 percent from 781 255 to 637 884. It comes as no surprise then that revenue from fixed-line services is down 18.2 percent to R8.5 billion.

Fixed line voice is the big boulder weighing Telkom down here though we should state that there are losses across the board. Revenue from voice and fixed-line subscriptions were down 28.8 percent to R3.1 billion.

Even data connectivity for fixed line fell 7.9 percent.

The bright light for Telkom however is operating revenue which, despite the massive losses in fixed-service revenue only fell 0.4 percent from R21.47 billion to R21.39 billion by September 2020.

Telkom was helped a lot by increased data usage during the lockdown. While this is fine for now, we are curious to see what Telkom looks like without as much demand for mobile internet.

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.

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