Telkom has again showed strong results at this year’s interim results announcement, but a concern to both Telkom and South Africa as a whole should be the continued decline in the number of fixed lines.
According to Telkom’s latest results the number of fixed lines decreased from 4 730 000 in September 2005 to 4 675 000 in September 2006. This is an effective reduction of 1.2%, and an extension of the downward decline seen in previous years. The biggest reduction in fixed lines was seen in the prepaid market, where the 870 000 lines in 2005 was reduced to 807 000 in 2006. This is a significant decrease of 7.2%.
Post-paid residential lines showed a decrease of 2.2%, from 1 608 000 to 1 572 000.
These reductions mean that South Africa’s fixed line penetration rate dropped below 10% for the first time in many years.
This should ring the alarm bells, especially since true broadband services are generally associated with fixed line access. Unfortunately the year-on-year decline of fixed lines does not seem to bother either Telkom or Government much.
The apathy regarding fixed line penetration rates will however cost South Africa dearly when it comes to broadband penetration rates, and unless this trend is nipped in the bud South Africa may just find itself unable to reach any of the broadband targets it set itself in the fixed broadband space.