Telkom has released its interim financial results for the six months ended 30 September 2018, which shows a big loss in fixed broadband subscribers.
Telkom’s fixed broadband subscribers declined from 999,311 in September 2017 to 974,181 in September 2018 – a year-on-year decline of 2.5%.
While this decline may not seem significant, it is a concerning trend which Telkom has not been able to stop since 2016.
Until 2016, Telkom always grew its fixed broadband subscriber numbers, thanks to the growing demand for faster broadband services and higher usage limits.
There was, however, a big change in the South African fixed broadband industry in 2016 – independent fibre network operators started to gain traction.
Many fibre operators started to roll out fibre networks between 2014 and 2016, which provided DSL subscribers with faster and more affordable fibre-to-the-home services.
Where Telkom previously had a monopoly on fixed-line broadband access through its copper network, this all changed with fibre.
While Openserve is a big player in the fibre-to-the-home market, it is not nearly as dominant as it used to be with DSL.
Telkom fixed broadband decline
Fibre-to-the-home has shown exceptional growth since Vumatel started to roll out its first network in Parkhurst in 2014.
According to Africa Analysis, the fibre industry passed approximately 30,000 units in 2014. By 2018, it has passed 1.1 million units.
To add to Telkom’s woes, Rain and Cell C also started to offer affordable fixed-LTE products as an ADSL alternative.
The table below shows Telkom’s fixed broadband subscriber numbers over the past 15 years.
|Telkom Fixed Broadband Subscribers|
Big Telkom fixed-line decline
Another big problem for Telkom is its rapid decline in fixed-line subscribers.
Telkom now has 2,566,000 fixed-line subscribers, down from 2,840,000 a year ago. This is a year-on-year decline of 274,000 lines.
If you consider that Telkom’s fixed-line subscribers peaked at 5,493,000 in 2000, it paints a picture of a company which is struggling to hold on to its customers.
When a person cancels their Telkom line, it means that the company cannot provide them with ADSL or voice products.
Unsurprisingly, total fixed-line voice traffic showed a huge decline over the last year – down from 6,449 million minutes in six months in 2017 to 5,630 million minutes in six months in 2018.
An equally big concern for Telkom is the challenge to win back customers after they have migrated to a fibre-to-the-home service. This is a very difficult task.
The table below should therefore be scary reading to any Telkom executive who wants to improve the company’s fortunes in the fixed broadband market.
|Telkom Fixed Lines|
|Date||Subscribers||YoY Change||6-Months Change|