{"id":470365,"date":"2022-11-23T08:11:14","date_gmt":"2022-11-23T06:11:14","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=470365"},"modified":"2022-11-23T10:24:56","modified_gmt":"2022-11-23T08:24:56","slug":"telkom-takes-a-beating","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/telecoms\/470365-telkom-takes-a-beating.html","title":{"rendered":"Telkom takes a beating"},"content":{"rendered":"

Telkom has published interim results<\/strong><\/a> for the first half of its 2023 financial year (H1 FY2023), revealing a decline in operating revenue as its mobile and fixed service divisions struggled to perform.<\/p>\n

Telkom Group CEO Serame Taukobong said the period from April 2022 to September 2022 was characterised by intensified competition and strained economic conditions placing consumers under pressure.<\/p>\n

“Group performance suffered under a sluggish economy, the increasing electricity and fuel prices, rising interest rates cycle, and high unemployment, which constrained and impacted levels of consumer spending,” said Taukobong.<\/p>\n

The company’s overall operating revenue declined by 0.7% from around R21.29 billion by September 2021 to R21.15 billion by September 2022.<\/p>\n

Mobile service revenue, which accounted for the most significant chunk of this revenue, was also down 0.7% \u2014 declining from R8.85 billion to R8.78 billion.<\/p>\n

That is despite Telkom’s active mobile subscribers climbing from 16.26 million to just over 18.02 million, an increase of 10.9%.<\/p>\n

However, the average revenue per user (ARPU) declined by 4.9% \u2014 from R92.40 to R87.87.<\/p>\n

Fixed-service revenue recorded a much bigger plunge from R6.97 billion to R6.28 billion \u2014 a drop of 9.8%.<\/p>\n

\"\"<\/a><\/p>\n

Telkom attributed this to its legacy fixed-line business remaining under pressure due to migration from traditional fixed voice to newer technologies.<\/p>\n

An increase of 10.8% in revenue from next-generation fixed services like fibre-to-the-home was not enough to stop an overall 4.3% revenue decline for its wholesale fixed business Openserve.<\/p>\n

Telkom said while over 65% of its fixed service revenue was derived from next-generation products and services, there was a pricing and margin gap between the new and legacy businesses.<\/p>\n

“The accelerated decline in legacy fixed business during the period limited overall performance,” the company said.<\/p>\n

Information technology revenue helped to somewhat stabilise the overall revenue decline, with an increase from R2.68 billion to R3.12 billion.<\/p>\n

Telkom shareholders enduring pain<\/h2>\n

Further indications of Telkom’s dismal performance include its earnings before interest, tax, depreciation, and amortisation (Ebitda) plummeting 17.3% from R5.98 billion to R4.94 billion.<\/p>\n

The company’s cash balance was also eroded from R3.39 billion to R2.50 billion.<\/p>\n

Telkom shareholders have endured pain as a result of the performance \u2014 with headline earnings per share crashing 52.5% from 285.5 cents to 137.2 cents.<\/p>\n

“Returning cash to shareholders remains a key element of our capital allocation framework,” Telkom stated.<\/p>\n

“Telkom is in the final year of the three-year dividend policy suspension period. The Board remains committed to reinstating the dividend policy at the end of FY2023 and is reviewing the policy.”<\/p>\n

The graph below summarises the key financial indicators from Telkom’s H1 FY2023 results.<\/p>\n

\n

Now read: MTN South Africa revenue hit by load-shedding and Cell C rescue<\/a><\/h2>\n","protected":false},"excerpt":{"rendered":"

Telkom’s interim results for the six months ended September 2022 showed a decline in mobile and fixed service revenue. <\/p>\n","protected":false},"author":23,"featured_media":408656,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[3],"tags":[40266,35,33386,1355,109,689],"class_list":["post-470365","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-telecoms","tag-business-connexion-bcx","tag-headline","tag-openserve","tag-serame-taukobong","tag-telkom","tag-telkom-mobile"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/470365"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=470365"}],"version-history":[{"count":2,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/470365\/revisions"}],"predecessor-version":[{"id":470379,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/470365\/revisions\/470379"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/408656"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=470365"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=470365"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=470365"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}