Telkom is rapidly losing fibre-to-the-home market share to operators like Vumatel and Octotel, but Telkom CEO Sipho Maseko denies that they are losing the fibre war.
The company’s interim results for the six months ended 30 September 2019 showed a big decline in fixed-broadband subscribers.
Telkom’s fixed-line broadband subscribers – which include ADSL, VDSL, and fibre-to-the-home customers – declined from 974,181 in September 2018 to 781,255 in September 2019.
It is still growing its fibre-to-the-home (FTTH) client base, but at a much slower rate than its competitors.
Over the last six months, Telkom increased its high-speed fixed broadband (FTTH and VDSL) subscriber base from 206,000 to 213,000.
Rapid growth in fibre-to-the-home market
While Telkom’s FTTH and VDSL’s growth has slowed to just over 1,000 subscribers per month, other fibre operators are rapidly increasing their numbers.
Vumatel continues to grow its fibre network and has already overtaken Openserve in the number of homes its network touches.
Vumatel is also actively targeting lower-income areas like Mitchells Plain and Alexandra with its new fibre-to-the-home products.
Octotel, South Africa’s third-largest fibre network operator, has already passed over 120,000 homes in Cape Town and passes an additional 4,000 homes each month.
The company is growing its subscriber base of 32,000 FTTH subscribers by 1,900 new subscribers each month.
Telkom says it is not losing the fibre war
Instead of doubling down on its fibre network investment, Telkom has cut its capital expenditure on its fibre network by 36.3% over the last year.
Many people saw this as Telkom admitting defeat in the fibre market, but Telkom CEO Sipho Maseko disagrees.
Speaking to The Money Show’s Bruce Whitfield, Maseko said Telkom is “certainly not” losing the fibre battle.
The Telkom CEO said they are currently focusing their investments on fibre-to-the-base-station, fibre-to-the-business, and to some extent, fibre-to-the-home.
Telkom said in its latest annual report that it has a strong focus on fibre to the business and fibre to the base station because they have significantly higher ARPU than FTTH passed.
He said the biggest prize for Telkom to go after is fibre-to-the-base-station to support its mobile data growth.
He explained that fibre to mobile base stations are needed to support high-speed mobile technologies like 5G, and this is where Telkom is very competitive.