Telkom Records R43 billion in Revenue, Up 3%

South African network provider, Telkom has delivered a solid top-line performance in the year to 31 March 2020, with revenue increasing 3.0% to R43.0 billion, mainly driven by a 54.4% increase in mobile service revenue. The company says its performance was underpinned by capital investments of R7.8 billion within the same period.

The mobile business continues to gain scale and remains the fastest-growing mobile business in South Africa. With 12 million customers, it now accounts for 35% of Telkom’s total operating revenues.

“Our Group revenue performance represents how ongoing investment – particularly in mobile, IT and masts and towers – enables Telkom to grow new revenue streams and offset traditional business shrinkage,” says Telkom Group Chief Executive, Sipho Maseko.

“We are seeing good returns on our investment, with mobile service revenue increasing by more than half and the connectivity rate for fibre-to-the-home improving from 38.4% in the prior year to 48.2% in the current year – the highest in the market.”

Earnings before interest, tax, depreciation and amortisation (EBITDA) declined 8.7% to R10.3 billion largely impacted by the decline in high margin fixed voice revenues as well as an increase in costs related to mobile business growth.

In line with global trends, fixed voice revenue continues to decline, with the group actively migrating customers from legacy systems to newer technologies to protect revenues and improve customer experience.

The group invested in the migration of customers to LTE and fibre, however, a 22.2% decline in fixed-voice revenue has impacted group revenue growth as it works to reach the revenue inflection point of new technologies at lower margins.

The mobile business remains profitable with its EBITDA margin improving from 1.4% to 14.9% over the past three years.

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