Telkom Reports a Decline in its Revenue

Image sourced from News24

On Tuesday, Telkom SA published annual financial results for the year ended 31 March 2022 and it reported that its revenue dropped 1.1% to R42.8 billion ($2.7-billion).

According to Tech Central, the telecommunications group is blaming tough competition and the weak economy for this poor performance. Telkom says despite this decline it has managed to deliver a stable EBITDA of R11.9 billion ($742.9-million) expanding the margin by 0.2ppts to 27.9%.

“This was achieved through various initiatives that introduced efficiency to operations while improving the customer experience,” Telkom Group CEO, Serame Taukobong, said.

Openserve increased fixed data revenue by 5.5% largely driven by the growth in carrier links. Over the period, an increase of 16.6% in fixed data consumption was seen across the network with an increase of 52.7% in the number of homes passed at a connectivity rate of 46.3%.

According to Taukobong, this is in line with Telkom’s strategy of accelerating the fibre to the home (FTTH) footprint while simultaneously focusing on connecting homes.

“In the second half of the year, overall fixed broadband subscribers increased for the first time in several years despite the decline in ADSL subscribers,” Taukobong said.

On the other hand, Telkom Mobile increased its customer base by 10.5% to 16.9 million subscribers with 62.9% of the base using broadband services. Mobile base stations increased by 13.7% with 42.4% growth in 4 5G sites.

The group said this reflects its preparedness for 5G deployment.

“As part of Telkom’s 5G strategy, Telkom targets to maintain a fibre backhaul ratio between 70% to 80%. As at end of FY2022, 68% of our base stations had fibre backhaul. The 22MHz of 3500MHz acquired in the recent spectrum auction enables Telkom 50MHz on a contiguous spectrum to deploy 5G on our mobile network,” Telkom said.

It added that its other subsidiary Swiftnet is expanding the range of products and preparing for the implementation of 5G by its clients.

“Over the period, Masts & Towers delivered revenue of R1.3 billion ($81.2-million) an increase of 4.4% from the prior year with an EBITDA margin of 70.4%. The EBITDA was impacted by a refined methodology of allocating property costs in the second half of the year. On a normalised basis, EBITDA increased by 2.7% to R1 million ($62 463,50) at a margin of 79.0%,” it said.

It also reported that BCX, its ICT subsidiary, remains challenged with revenue declining marginally at 2.6%.

“Telkom grew its earnings, with underlying HEPS and BEPS increasing by 2.5% and 1.4% respectively,” it said.

Edited by Zintle Nkohla

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