South African operator Telkom reported a 15.1 percent increase in its EBITDA for the first half ended 30 September to ZAR 5 billion, helped by a 2.3 percent fall in operating costs and smaller losses at its mobile business. Revenues rose 1.2 percent to ZAR 13.46 billion, led by the expansion in the mobile business, where service and subscription revenue increased 41 percent to ZAR 1.2 billion. Headline earnings per share, excluding the one-off costs of its redundancy programme, increased 13.9 percent to ZAR 2.81.
Telkom said it continued with its efforts to transform the company and stabilise revenue. Operating revenue increased by 5.5 percent compared to the same period last year, spurred on by the continuing growth in the mobile business, and mobile data revenue jumped 69 percent. Fixed line usage continues to decline, with fixed voice revenue decreasing by about 3 percent compared to the same period a year ago. Data connectivity revenue dropped by more than 5 percent, as more competitors moved to their own infrastructure and Telkom migrated customers from leased lines to new service offerings. Excluding revenue from leased lines, fixed data revenue was up more than 4 percent. Telkom said it also achieved good growth in the consumer business with revenue from ADSL growing in excess of 5 percent.
Capital expenditure rose by 20 percent year-on-year to ZAR 2.34 billion, on the expansion of Telkom's mobile, fibre and LTE networks. Telkom said it increased the number of mobile network sites 3.1 percent to 2,549, and funding for FTTH was intensified to maintain competitive advantage and retain existing customers. The number of ADSL subscribers increased 4.2 percent to 1.012 million. Active mobile subscribers rose by 11.5 percent to 2.257 million and generated ARPU of ZAR 89.05.
During the period, competition increased substantially while the economy remained soft. Telkom said it expects the market challenges to continue in H2, but it will continue with its focus on managing costs and expects the mobile business to be EBITDA positive by year end. In the first half, its mobile loss already narrowed to ZAR 37 million from ZAR 385 million a year ago. Following the acquisition of Business Connexion in September, the group will reorganise into three divisions going forward: consumer, business and Openservce (wholeale).
