Telkom invested less in its mobile network between April and September 2023 than during the same period last year, the company’s half-year results have revealed.
During the same period, Telkom showed growth in mobile service revenue, which increased from R10.6 billion in September 2022 to R11 billion in September 2023, working out to approximately 4.1% revenue growth.
“Total external revenue from Mobile operations grew by 4.1% to R11 035 million, driven by 5.8% growth in mobile service revenue as the demand for data surged by 22.9% to 676 petabytes for the period. The growth in data demand is evident,” said Serame Taukobong, Telkom CEO.
Across Telkom’s mobile service offerings, revenue from voice and subscriptions, interconnection, handset and equipment sales, and financing declined.
However, revenue from mobile data surged, climbing from R6.3 billion in September 2022 to almost R7 billion in September 2023.
Telkom also grew its mobile subscriber base from just over 18 million in September 2022 to just short of 18.3 million in September 2023.
“Our subscriber base now stands at 18.3 million with a blended average revenue per user (ARPU) of R85,” said Taukobong.
“Our pre-paid customer base expanded by 1.0% to reach 15.3 million, while the postpaid segment grew by 3.6%, reaching 3.0 million subscribers.”
However, it appears that its mobile subscriber growth has slowed slightly. The increase between September 2022 and 2023 is approximately 1.5%, compared to about 11% between September 2021 and 2022.
The partially state-owned telecoms company had invested R1.9 billion in its mobile network in the previous financial year. This decreased to R1.6 billion as of 30 September 2023.
It appears to have cut capital expenditure (capex) across all aspects of its business, with overall capex dropping by approximately R546 million or 14.8%.
However, this has improved its capex-to-revenue ratio. It sat at 14.4% as of 30 September 2023, down from 17.4% in September 2022.
“We will continue to invest in our infrastructure to facilitate growth, with the capex-to-revenue ratio expected to be on the lower end of our 16% to 18% guidance for FY2024,” said Taukobong.
Telkom Mobile active subscribers — September 2011 to September 2023
Although Telkom’s Mobile active subscribers climbed between September 2022 and 2023, the rate of growth has slowed significantly, particularly when compared to the period from September 2017 to 2019.
Telkom Mobile broadband subscribers — September 2014 to September 2023
Much like with Telkom’s Mobile active subscribers, the growth rate of its mobile broadband subscriber base is significantly slower than in previous years.
However, Telkom has improved its customer acquisition since the flat growth period between September 2021 and March 2022.
Telkom Mobile’s capital expenditure
Telkom has cut capex across all aspects of its business by a total of R546 — a drop of 14.8% compared to the previous reporting period.
In the past, Telkom has shifted between cutting fibre capex in favour of increased investment in its mobile business and vice versa.
In September 2022, Telkom Group chief financial officer Dirk Reyneke said the increased investment in its mobile segment at the time was to lessen roaming costs that resulted from high-intensity load-shedding.
This is because the network operator has roaming agreements with other mobile network operators to ensure it can provide coverage in areas where its network infrastructure doesn’t reach.
Overall, the company’s capex for the reporting period dropped from nearly R3.7 billion to R3.15 billion.
The cutting of Telkom’s capital expenditure in the reporting period is broken down as follows: