South African operator Telkom said it expects an at least 70 percent annual decline in basic EPS for its fiscal first half to September, due to losses from its new mobile business and its activities in the rest of Africa. The company is taking an impairment charge of ZAR 450 million on iWayAfrica, which has suffered from higher customer churn and fluctuations in exchange rates. Excluding the impairment, basic EPS will down at least 40 percent on the year-earlier period. Telkom said it will also restate the year-earlier figures to reflect its Nigerian business Multi-Links as a discontinued operations. Multi-Links contributed losses of ZAR 200 million in this year's first half. If the sale is completed before the end of the period, it will result in a net loss of ZAR 650 million. Telkom is selling the company to Helios Towers, but at the moment is still awaiting regulatory clearance for the deal. In its home market, Telkom said it expects revenues to remain under pressure for some time, due to competition, pricing pressure and regulatory intervention, as well as the uncertain economic climate. Its fixed-line revenues are falling due to mobile substitution, and international revenues are under pressure as new subsea cables provide more competition. Telkom Mobile incurred losses of ZAR 900 million for the five months ended 31 August, but is progressing satisfactorily and in line with expectations, the company said. The subscriber base has grown to 882,235 revenue-generating customers from the start of the financial year. The blended ARPU as at 31 August was ZAR 61.97, an increase of 174 percent compared with 31 March. Telkom plans to release its results for the first half on 22 November.
