Despite rapidly growing its fibre-to-the-home (FTTH) network in South Africa in the past year, Telkom’s Openserve division lost over 200,000 fixed-line customers.
According to the telecoms company’s Abridged Annual Results for 2023, fixed-access lines declined from 997,000 to 793,000 — a drop of 20%.
Fixed broadband subscribers accounted for 567,289 of the remaining fixed-line customers, down 2.9% from 584,189.
Given that the fixed broadband decline is lower than the overall fixed line drop, it would appear that most cancellations came from customers who only used a Telkom fixed line for telephone services, and not accessing the Internet.
The graph below shows the declines in fixed-access lines and fixed broadband customers from March 2016 to March 2023.
The overall decline in fixed customers comes despite Telkom significantly increasing its FTTH base over the same period.
As of March 2023, the telecoms operator had 492,812 homes connected with its fibre, a big jump of 26.7% from the 389,109 it had in March 2022.
Its fibre network also passes more homes. Whereas Openserve’s FTTH network reached 839,691 households by March 2022, it had passed 1,040,565 a year later — an increase of 23.9%.
That means 47.4% of homes with access to Openserve fibre use the network.
This figure, referred to as the connectivity rate — is an important measure for fibre network operators, as it indicates whether they are getting uptake and making a return on their investment.
Openserve’s figure is among the highest in the industry.
While Telkom does not publish precise numbers for its declining DSL customer base, a figure can be calculated by subtracting the number of homes connected to fibre from the total fixed broadband subscribers.
That suggests Telkom had about 74,477 DSL customers remaining in South Africa, down 37% from the roughly 118,611 it had a year earlier.
The graph below shows how Telkom’s FTTH and DSL subscribers changed between 2016 and 2023.
Telkom CEO Serame Taukobong said because of the growth in FTTH, next-generation revenue now accounted for nearly 70% of Telkom’s fixed revenue base.
“Fixed data next-generation revenue grew by 10.2%, driven by the increased rollout of fibre and healthy growth in carrier services and enterprise services,” said Taukobong.
Fixed data consumption on Openserve’s network grew 13.8% and is just shy of 1,900 petabytes, or 1.9 billion gigabytes.
Taukobong added that fixed performance was limited by pricing gaps between the new-generation and legacy businesses, as declines in fixed-voice and legacy revenues accelerated during the year.
As a result, Telkom’s total fixed-service revenue declined from roughly R13.65 billion in March 2022 to R12.32 billion — a 9.7% drop.
Taukobong said although Telkom’s costs were well managed and grew by less than inflation, significant increases in backup power due to unreliable energy supply put pressure on profitability.
Openserve said it maintained high network availability over its access, transport, and core network layers — achieving 99.89%, 99.50%, and 99.99% uptime, respectively.