Jobs and profit bloodbath in South African telecoms

Statistics South Africa has released its 2019 report on the post and telecommunications industry today, revealing overall job loss and decreasing profits.

The report is released every three to five years and reveals analyses of the post and telecommunications industry.

The most recent report is based on surveys from the financial year that ended on 30 June 2019.

It showed that profit margins for the telecommunications sector in 2019 were 1.1% — a substantial decrease from 29.2% in 2010.

The industry generated R352 billion in 2019, R335 billion (95%) of which was generated from the dominant telecommunications sector.

The income generated during the 2018/19 financial year represents an annual increase of 4.5% since 2016.

Notably, the post and associated courier services sector increased its percentage share from 3.4% in 2010 to 5.0% at the end of 2019.

The industry recorded a loss of 1907 employees between 2016 and 2019, with the loss of employment in telecommunications (5,498 jobs) being offset by employment gains in the post and associated courier services sector.

The total number of people employed in the post and telecommunications industry at the end of 2019 was 98,495, indicating a decrease of 0.6% per year since 2016.

Mobile prepaid and contract services contributed 50% and 15%, respectively, to the R249.5 billion income generated by telecommunication services.

Voice calls contributed 41% to the income generated by telecommunication services, while revenue generated from the sale of decoders and fixed-line phones decreased significantly between 2016 and 2019.

The table below summarises turnover, net profit/loss, and profit margins for both sectors between 2010 and 2019:

Telecommunications
Year 2010 2013 2016 2019
Turnover (R million) 218,486 242,499 284,369 322,108
Net profit/loss after tax (R million) 63,841 11,511 15,745 3,494
Profit Margin (%) 29.2 4.7 5.5 1.1
Post and associated courier activities
Year 2010 2013 2016 2019
Turnover (R million) 9,286 11,039 12,673 16,042
Net profit/loss after tax (R million) 495 -543 -983 -912
Profit Margin (%) 5.3 -4.9 -7.8 -5.7

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Jobs and profit bloodbath in South African telecoms