South Africa operator Telkom Group said its net revenue rose by 7 percent to ZAR 7.2 billion for the three months to 31 December. Operating expenses in the fiscal third quarter rose a faster 13 percent to ZAR 4.7 billion due to the acquisition of IT services provider Business Connexion (BCX). Excluding BCX, revenue fell 0.3 percent and costs were up just 2 percent, Telkom said in a trading statement.
Active mobile subscribers grew by 22 percent year-on-year to 2.57 million, delivering average revenue per user of ZAR 90.26. Post-paid subscribers grew by 45 percent, while prepaid subscribers increased by 15 percent. Mobile data revenue climbed by 56 percent to ZAR 417 million, while fixed voice revenue declined by 5 percent year-on-year to ZAR 3.6 billion. The number of DSL subscribers increased by 3 percent to 1.02 million, and Telkom passed 1.25 million homes with FTTC and 56,000 with FTTH at the end of the period. Fixed data revenue, excluding leased-line revenue, increased by 5 percent.
Telkom said the weak economy, the poor state of the rand, higher interest rates and rising inflation have created a "challenging" outlook. It expects continued weakness in the economy and anticipates that customers will migrate to cheaper packages or delay spending on new infrastructure. The company's target for breakeven at the mobile business by March 2016 has been "tempered" by the difficult operating conditions and cost pressures, it said. However, revenue growth in mobile is expected to continue.
