8ta's Financial Performance

[Andre123]

There have been lots of stories in the newspapers this week about telkoms poor results. 8ta has been performing way worse than expected and it doesn't look like it is going to improve anytime soon. So i just wonder what this means for those of us who took out contracts. Are they gonna spend any money on improving their service / infrastructure etc? I've been looking at the speedtest results that people are posting and I have to say that mine is dismall.

 

[MickeyD]

There have been lots of stories in the newspapers this week about telkoms poor results. 8ta has been performing way worse than expected and it doesn't look like it is going to improve anytime soon. So i just wonder what this means for those of us who took out contracts. Are they gonna spend any money on improving their service / infrastructure etc? I've been looking at the speedtest results that people are posting and I have to say that mine is dismall.

What was their planned losses? Only then will we know whether they are performing as expected (per their 5 year business plan). iirc they were predicting break even point in 2013/14.

 

[sajunky]

There have been lots of stories in the newspapers this week about telkoms poor results.

This was expected. I wonder why they maintain it was unexpected? Such rollout is very costly. What is worrying me is that (1) it seem to be much more painful for customers than competitors and (2) that GoBig specials will end this year, while network is not fixed yet. They will lose these customers.

 

[Fuma]

Maybe it is a good thing that they performed worse so that they can improve on their problems and even get more subscribers?

It could also be a bad thing since they will lose more customers.

 

[Pavan]

How does the +/- R2.2bn loss in ebidta compare to that of Cell C's first year in the market?

Also, hows does the > 1 million customers compare to Cell C's acquisition numbers in their first year? Just interested to know really...

 

[Pavan]

Cell C results from end of 2003 (Launch Date: 17/11/2001):

3 million subscribers by the end of 2003
1.9 million active users of the network
84 percent, or 1.6 million of its subscribers were prepaid users
Average revenue per user (Arpu) for prepaid was R62 and R409 for contract users, with a blended Arpu of R110.

 

[Andre123]

From what I read they always expected to make a loss initially. That is understandable. The problem is that those losses are bigger than expected and it is going to take them longer than expected to break even and to start making money. On top of that the market is now 'mature'. So there is much less room for a new player to get market share.

I agree with what sajunky is saying. The 10 gig special ends in December. Then they will have to compete with everyone else on equal footing. I think it will be very difficult for them. They obviously lose money on that special but used it as a means to get new customers.

 

[sajunky]

The problem is that those losses are bigger than expected and it is going to take them longer than expected to break even and to start making money.

You don't know what loses they have expected. What you hear is [BOLD]what media has expected[/BOLD]. And media is always biased towards parastatals. They are forces behind media to grab chunks of states shares. The last time a big winner was Vodafone on the divorce of Vodacom with Telkom. Just a moment before removing president from the office.