Telkom cuts off Multi-Links Funding

Telkom reports 35% drop in full-year profits (image source:

SOUTH Africa and Africa’s largest fixed line operator, Telkom SA Limited has stopped all funding to Nigeria’s Multi-Links Telecommunications Ltd.

This was revealed during the group’s annual results for the year ended 31 March 2011 at a media briefing at the Sandton Convention Centre, Johannesburg.

The event was the first presentation by Nombulelo Moholi since her appointment as the Telkom Group CEO.

Multi-Links, Visafone deal on the rocks
The Multi-Links/ Visafonedeal will not proceed as planned.
“On 31 March 2011, Telkom and Visafone Communications Limited entered into a legally binding agreement to sell Multi-Links’ CDMA business to Visafone.

“Certain conditions precedent have not been met and the transaction will not proceed.
“The Telkom Board resolved on 10 June 2011 to stop all funding to Multi-Links Telecommunications Limited,” says Moholi.
Multi-Links Telecommunications is a company that Telkom Group acquired in March 2007. Investing in Nigeria, one of Africa’s fastest growing telecoms marketswas part of the company’s African expansion plans.Moholi indicated that future dealings in Africa will purely be a board decision.


There have been significant problems within the Multi-Links business, and the current focus is purely on stabilizing the South African business, confirmed acting Chief Financial Officer Deon Fredericks.
Fredericks says the company intends to review its African strategy.
“We’ve appointed a new MD Telkom Group International, Motlatsi Nzeku to review the strategy in Africa.
“Africa is still an important part of our expansion plans,” says Fredericks.
Fredericks indicated that Telkom Group has made significant progress in it’s African foray by integrating its two Internet service Providers (ISPs): AOL and MWeb Africa to form iWay, thereby streamlining its broadband offering on the continent.
“We’re trying to resolve the Multi-Links issue ensure that we complete the integration of iWay and ensure profitability of iWay going forward.,” says Fredericks.

Annual Results
Moholi highlighted that operating expenditure decreased by 1.5% to R29.7 billion despite the 10.3% growth in employee expenditure to R9.7 billion and mobile start-up expenditure of R1.2 billion. This decrease was partly due to the drop in termination rates payable to other operators.

Telkom reported a 35% drop in full-year profits, citing the new South African mobile venture, 8.ta. Telkom recorded a 5.2% revenue fall to 33.4 billion rand, while earnings before interest, tax, depreciation and amortisation dropped by 11%.
“Telkom will still look into Africa as an area of growth,” says Moholi.

By: Bontle Moeng