Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.

Business of Tech

Telkom SA revenue under pressure despite mobile growth

Article Image
Telkom South Africa's third-quarter revenue was under pressure as its legacy fixed line offering continued a downward trend and enterprise ICT solutions business, BCX, struggled with supply-chain challenges.

Growth in Telkom's mobile business wasn't able to offset the other declines and group revenue for the quarter ended December 31, 2021, declined by 2.3% year-on-year (YoY) to almost R10.8 billion (US$694 million) the operator said in a trading update on Monday.

"Notwithstanding the operational performance, our Group revenue was under pressure in Q3 FY2022. Our Mobile and Masts and Tower businesses continued to grow, sustaining the higher levels demonstrated in Q3 FY2021. However, this was offset by the ongoing challenges in the legacy business and IT business," said Telkom Group CEO, Serame Taukobong.

Telkom said that the fixed-line business continues to decline, although the rate of decline has slowed down from double digit decline in the previous year to 7.1% this year.

"The IT business remains challenged due to the lingering impact of COVID-19 and the global shortage of chips which led to BCX being unable to fulfill backorders for IT hardware in the first nine months of the financial year," the operator said.

BCX – which Telkom acquired in 2015 for R2.7 billion (about $205 million at the time) – saw revenue drop by 3.6% in Q3 to almost R3.8 billion ($242 million) because of the global supply challenges.

Taukobong said that Telkom's wholesale business, Openserve, however continued its growth trajectory in the local fiber market. Openserve grew homes passed with fiber by 65.5% YoY, to 801,000, while increasing the number of homes connected with fiber by 38.6% YoY.

Mobile momentum

Telkom's mobile business is still on the rise, with active mobile customers up 10% YoY, to 16.4 million, and mobile service revenue increased 2.3% to R4.4 billion ($283 million).

"Given the challenging macro-economic environment, postpaid consumers are becoming more cost savvy and are continuously searching for ways to manage and reduce their spend, resulting in real growth only emanating from the prepaid market," Telkom said.

SA's third-largest mobile operator reported prepaid customer growth of 12% YoY, to 13.8 million, while postpaid customers remained pretty flat at almost 2.6 million.

"Mobile broadband demand continued to grow from the significantly higher volumes seen in the prior year. Mobile traffic grew 7.9% year-on-year from a higher base to 246 petabytes, supported by year-on-year growth of mobile broadband customers. To date, total broadband customers (fixed and mobile) increased by 3.3% year on year to 11 million", said Taukobong.

Mobile broadband customers increased 4% to 10.5 million, representing 63.6% of all of Telkom's active mobile customers, and mobile data revenue grew 2.6% to R3.1 billion ($201 million).

Regulatory roadblocks

Telkom also made some reference to its ongoing spectrum battle with telecoms regulator ICASA.

"Telkom supports the release of spectrum. It should be released as soon as possible following a lawful, reasonable, and fair process. The release of spectrum must promote effective competition for the benefit the consumer, the sector, and economy. As such, Telkom has requested an expedited review of the currently flawed process," it said.

Telkom has requested for its court case on the matter to be heard in early March 2022.

Commenting on last month's news of an investigation by SA's Special Investing Unit (SIU) ordered by President Cyril Ramaphosa the operator said it "does not anticipate that the investigation by the SIU will reveal any new facts and any losses."

"Therefore, at this point, Telkom expects no material impact on its financial statements resulting from outcomes of the SIU investigation," it added.

The operator's plans to spin off and list its masts and tower business, Swiftnet, is also still on track.

Telkom said it hopes to have Swiftnet listed in Johannesburg before the end of March 2022. Telkom said its tower build program remains on track with 56 towers constructed in the quarter, totaling 114 towers constructed in the financial year.

Related posts:

*Top image is of Telkom Group CEO, Serame Taukobong (Source: Telkom).

— Paula Gilbert, Editor, Connecting Africa

Innovation hub


Hot startup of the month: Data science marketplace Zindi

This month's hot startup is social enterprise Zindi, which is a professional network for data science in Africa.


Côte d'Ivoire e-health platform Orange Santé launched

Pan-African operator Orange has partnered with Moroccan start-up DabaDoc to create an e-health platform to help Ivorians book doctor’s appointments online.

More Innovation hub

Latest video

More videos

Guest Perspectives


Omdia View: May 2022

By Omdia Analysts

SpaceX-owned Starlink's plans to launch a satellite broadband service in Africa was a major highlight in May 2022, says Omdia's analysts.


Omdia View: April 2022

By Omdia Analysts

This month's Omdia View highlights indicate a shift to digital transformation and operational consolidation to maximize return on investments.

More Guest Perspectives

Partner perspectives

All Partner Perspectives

Flash poll

All polls

Archived webinars

Africa Green ICT: Lighting Up a Sustainable Continent

The ICT industry is the leading industry in the commitment to carbon neutrality, whose focus has shifted from setting ambitious targets to taking initiatives. The push for zero-carbon and for green energy development, it isn't just about CSR – it's also good for sustainable business.

The path to sustainable development requires green energy. Governments are looking at potential policy approaches to make green energy more widely available and affordable. Without sustainable energy, there will be no digital transformation and no chance of making Africa more economically competitive in the post-pandemic era.

Africa Green ICT Webinar 2022 will bring together ICT industry leaders and senior industrial analysts to provide insight, best practices and key learnings on how to achieve zero-carbon targets and practice green development in Africa.

More Webinars

Sponsored video

More videos

AfricaCom perspectives


Digital inclusion as a catalyst for economic empowerment: Mastercard's Imelda Ngunzu

Mastercard's Imelda Ngunzu talks to Connecting Africa about how digital payment solutions and mobile money are transforming the lives of small business owners, women and marginalized groups in East Africa.


Accelerating women in STEM: In conversation with GirlCode's Tinyiko Simbine

GirlCode co-founder and CFO Tinyiko Simbine talks about why it's important to help girls and young women excel in science, technology, engineering and mathematics (STEM) fields.


How Poa Internet is unlocking meaningful connectivity in East Africa

Poa Internet's CEO Andy Halsall shares his views on what it takes to develop last-mile connectivity and get Africans online in a meaningful way.

More AfricaCom perspectives

Like us on Facebook

Newsletter Sign Up

Sign Up