Telkom has cemented its position as the third-largest mobile network in South Africa thanks to significant growth in mobile traffic and subscribers over the last six months.
This is according to the company’s interim results for the six months ended 30 September, which showed an overall revenue drop of 0.4% to R22 billion.
“Telkom’s business units were impacted in different ways by the pandemic in the first half of the year,” Telkom said.
“The Consumer business benefited from the increased demand from people working from home, while BCX and SMB (known as Yep!) were negatively impacted by the national lockdown, as corporate customers were under severe financial pressure.”
HEPS increased by 25.4% to 219.0 cents per share while BEPS increased by 29.5% to 217.5 cents per share compared to the prior period.
“We weathered the COVID-19 storm and completed the first half of the year with improved profitability, strong liquidity and a strengthened balance sheet,” Telkom said.
Telkom Mobile takes off under lockdown
Telkom Mobile performed exceptionally well, boasting 47.8% growth in service revenue and a 53.8% increase in mobile data revenue.
Telkom said this growth was attained despite the negative impact of the COVID-19 lockdown on distribution channels, adding that it was aided by the increase in people working from home.
“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%,” Telkom said.
“The ongoing investment in our mobile network and the temporary spectrum assignment enabled our Mobile business to support the 80.8% increase in broadband traffic.”
Telkom Mobile now has 13.7 million active mobile subscribers, 11.1 million of which are prepaid and 2.6 million of which are postpaid.
Telkom also saw a reduction in direct costs driven by a slowdown in the cost of handset and equipment due to the lockdown’s impact on distribution.
This enabled the mobile business to reduce its direct cost-to-revenue ratio from 52.6% in the prior period to 38.2%, leading to a significant increase in the division’s profitability.
“Excluding handsets and equipment, the cost to serve to mobile service revenue ratio was optimised from 36.3% in the prior period to 30.5%,” Telkom said.
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