JSE-listed Telkom has started the 2024 financial year with good momentum, said its CEO Serame Taukobong.
Telkom said group revenue increased by 3.8% driven by the continued uptake of its new generation network (NGN) products by customers as well as increased data traffic.
“We focused on offering attractive value propositions to customers in our Mobile business which increased subscribers and data usage, while the focused smart deployment of fibre infrastructure saw Openserve sustain growth in all three NGN customer segments ‘ broadband, carrier and enterprise,” said Taukobong.
“We are pleased that cost savings from our recent labour restructuring process offset the impact of load
shedding as planned, but the legacy revenue declines along with higher ECL provisions weighed down
on overall Group profitability. The Group will continue improving its cost base to improve profitability in
the medium term.”
The Group EBITDA declined by 4.2% contracting the EBITDA margin by 1.7 percentage points (ppt) to 21.0%,
largely affected by the decline of legacy revenues as well as higher direct and operating costs.
“The benefit of reduced employee costs following the restructuring exercise, has been partly negated by the additional spend on diesel to mitigate the impact of load shedding, as well as a slight increase in direct costs, which were negatively impacted by the product mix for the quarter,” said Taukobong.
“We also experienced an increase in the provision for bad debts, with consumers under increasing strain from the macro-economic environment.”
Mobile service revenue growth drove Telkom Consumer performance
Telkom Consumer recorded a 1.8% increase in revenue during the quarter, to R6.3 billion.
“The growth can largely be attributed to the mobile business and the expansion of our fibre offerings. We
experienced a 12.8% increase in our fibre subscriber base during this period. Our legacy copper-based
voice revenues, however, continued their downward trajectory, declining by 24.2%. This decline is a result
of our deliberate effort to reduce the risk associated with legacy voice services, which now accounts for
only 4.8% of gross revenue,” the company said.
Mobile revenue advanced by 5.2%, reaching R5 448 million primarily driven by our continued provision of value-compelling propositions, which effectively stimulated data consumption. The biggest contributor was Mobile service revenue which increased by 6.5% to R4 561 million y-o-y. Increasingly, consumers sought value on our private pricing platform, Mo’Nice which now accounts for 29.5% of total service revenue.
Openserve
Openserve grew its homes passed base by 24.4% y-o-y to 1 107 794 homes.
“This focused execution, has enabled Openserve to surpass the half a million mark of the number of homes connected with fibre, as they rose by 24.2% to 515 201 y-on-y, while maintaining its leading connectivity rate of 46.5%,” said the company.
“Its digitally led innovative solutions, as well as connecting its fibre broadband customers with an average of
less than 3 days, contributed to an improved interaction Net Promoter Score of 70.”
BCX
BCX revenue up driven by growth of IT business.
Revenue rose by 2.9% to R3 499 million in the first quarter y-o-y largely driven by the double-digit growth in the IT business, slightly offset by declines in the Converged Communications business.
“The revenue growth mix was positively skewed towards growth in the local and international software and hardware business.”
The IT business increased by 17.5% to R2’068 million, attributable to growth in the software and hardware business of 62.9% resulting from fulfilling order backlogs, the easing of global chip shortages as well as successful new business development initiatives. The business also benefitted from strengthened cloud offerings and solutions brought about by the Dotcom acquisition, while IT services declined by 3.4%.
