Telkom adds 73, 428 DSL users, plans to create infrastructure network business

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By Gugu Lourie

South Africa’s Telkom extended a run of strong subscriber growth, added 73, 428 new broadband subscriber line customers to its network.

The gains by the once struggling telco has prompted it to create a new infrastructure network business.

The company said on Monday ADSL customers rose 7.9% to more than 1 million in the year to end-March 2015 compared to 931 858 in 2014.

But Telkom is being challenged by its rivals and new players in the market dominated by mobile broadband. Rivals such as Afrihost, owned by MTN, Neotel, Vodacom, OpenWeb and others are competing seriously with Telkom’s DSL services through wireless broadband services.

The growth in Telkom’s DSL line customers have helped the company’s fixed-line data revenue to increase by 1,5% to R10,4 billion and mobile data revenue increased 50,6% to R988 million.

“We continued to see pressure on voice usage, particularly in our enterprise business, resulting in an 11,9 percent decrease in fixed line voice and interconnection revenue to R8,3 billion. Despite the high churn rates in our consumer business, we grew our ADSL subscribers by 7,9 percent to 1 005 286,” said Sipho Maseko, Telkom’s CEO.  The company is also planning to establish a new infrastructure network business.

“We are reviewing our current operating model. A major part of this review is looking at a deep functional separation between our wholesale and retail businesses. We foresee an infrastructure business unit which will be accountable for network deployment and network efficiency. For this operating model to succeed, we must have an efficient and high-performing network. We will update the market regarding our plans during the third quarter of the calendar year,” said Maseko.

Public payphones continues to fade

But Telkom also continues to see its old public payphone disappear as more people migrate to using their mobile phones and as others are destroyed by vandals looking for copper.

In the year to end March 2015, Telkom public payphones were reduced to 45 000 versus 79 000 in 2014.

The company said last year it was evaluating options to turn its thousands of public payphones into Wi-Fi hotspots. Such a move would bring these payphones into the Internet age – transforming the relics of the 20th century communication into next-generation broadband hubs.

Maseko said last year: “We are looking at a number of options. One of them is to change the public payphones into Wi-Fi hotspots.”

However, Telkom is mum on the future of public payphones.

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