Telkom’s fixed line battle
Telkom today released their financial results for six months ending September 30, 2009, revealing a significant drop in profits. Headline earnings per share from continuing operations decreased by 37.9 percent to 242.2 cents, a result of competition and the weaker economic environment according to Telkom CEO Reuben September.
Telkom continued to experience a decline in their fixed line subscriber numbers. According to the company’s latest results they now have 4,398,000 fixed access lines, down from 4,504,000 a year ago. While ISDN and prepaid phone lines increased, the number of post paid subscribers declines by 5.1% – from 2,839,000 to 2,694,000.
This drop in the number of fixed line subscribers means that the country’s fixed line penetration rate declined from 9.3% in September 2008 to the current 8.9%. This decline is also partly responsible for the 7.3% decline in total fixed line traffic which dropped from 12,709-million minutes a year ago to 11,785-million minutes now.
There was a particularly big dip in local fixed line traffic which saw a 21.7% year-on-year decline: down from 4,688-million minutes last year to 3,670-million minutes over the latest results period. National traffic also took a knock, down 11.4% from 1,870-million minutes to 1,656-million minutes.
While local, long distance, fixed-to-mobile and international outgoing fixed line traffic all dropped, it was interesting to note that Telkom’s international VoIP traffic increased by 29.4% while subscription based calling increased by 9.7%.
Telkom has previously said that it will focus heavily on mobile services to compensate for the Vodacom loss and to compliment its fixed line services, but to date the company was only able to sign up 8,744 W-CDMA subscribers who were predominantly provided with mobile data services and fixed line look-alike products.
Telkom’s fixed line battle – discussion
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