South African fixed-line incumbent Telkom reported a 4 percent increase in its first-half operating revenue to ZAR 18.7 billion, while EBITDA decreased 12.2 percent to ZAR 5.1 billion. The EBITDA margin fell to 27.3 percent for the six months to 30 September, compared to 32.3 percent a year earlier, mainly due to higher operating costs in its home market. Headline earnings from continuing operations decreased by 37.9 percent to ZAR 0.242 per share, and basic EPS moved to a loss of ZAR 0.150 per share, compared to earnings of ZAR 0.365 per share a year ago due to an impairment on goodwill at Multi-Links in Nigeria. The company said both its South African and Nigerian units were under pressure, with the former hit by higher operating costs and the latter by pricing pressures.
The number of fixed lines in South Africa was down by 2.4 percent year-on-year to 4.398 million, while Telkom's ADSL subscriber base grew by 22.6 percent over the last year to 602,720 in September and was up from 548,015 at 31 March. Broadband penetration as a percentage of residential postpaid lines was 17.5 percent, up from 15.4 percent in March. Telkom said that it continues to aggressively promote its broadband packages by focusing its marketing efforts on particular customer groupings and the up-selling of the higher-end broadband packages. Average revenue per fixed line increased 1.7 percent in the year to September to ZAR 2,679. As well as promoting entry-level ADSL packages with "extremely competitive" pricing, the operator is trying to increase the bandwidth available and is negotiating a triple-play partnership to provide customers with enhanced content.
Telkom also announced 8,744 mobile WCDMA subscribers, up from 5,253 in March. The operator is in talks with vendors on lease arrangements and other companies on infrastructure sharing in order to expand the mobility services. Launching a full mobile service is estimated to cost ZAR 6 billion over five years. Nombulelo ‘Pinky’ Moholi, managing director of Telkom South Africa, told a conference call on the results that the company will look to launch the mobile service next year and could invest ZAR 1 billion in the first year. Telkom was previously prevented from entering the mobile market due to its stake in Vodacom, which has now been sold to Vodafone. The mobile service would be integrated with fixed-line offerings and marketed through the company's extensive retail network, Dow Jones reported from the call.
In Nigeria, Multi-Links finished the period with 2.036 million active customers, up 29.6 percent from a year ago. The company said it was making progress on cost-reduction and revenue-enhancing efforts, with monthly revenues exceeding NGN 3 billion since August. ARPU decreased to USD 7 from USD 13 a year ago and USD 12 in the March period, but the company still targets USD 10 over the medium term. EVDO customers of almost 20,000 were generating ARPU around USD 30. While the Multi-Links EBITDA margin was a negative 20.0 percent in the six-month period, Telkom said this has narrowed in recent months to single digits. The African ISP activities had 16,400 customers at Africa Online, down 7.9 percent from a year ago, and 22,100 at MWeb.