The fixed-line phone operator released its last annual financial results with Vodacom’s contribution yesterday, revealing a 6.9percent increase in revenue to R35.9-billion.<\/p>\n
Analysts said the results were in line with expectations, but the ordinary dividend of 115 cents per share and a special dividend of 260 cents per share, which the group declared, surprised on the upside.<\/p>\n
The company’s results remained positive, largely due to Vodacom’s performance, analysts said.<\/p>\n
Vodacom, the group’s cellphone operator until last month, carried the overall growth with a 14.6percent jump in revenue to R27.6- billion.<\/p>\n
Telkom sold off 15percent of its 50percent stake in Vodacom to UK-based Vodafone for R22.5-billion. The remaining 35percent has been unbundled on the stock exchange.<\/p>\n
Telkom’s core business of fixed-line telephony showed a 3.3percent increase, primarily due to higher data income, interconnection charges, and ever-increasing basic fixed-line tariffs.<\/p>\n
Call traffic revenue on the fixed-line network continued to slide, however, with a 3.9percent drop resulting in a second consecutive group operating loss of 34percent.<\/p>\n
Telkom announced that it would delist from the New York Stock Exchange, given the current global economic climate and the business imperative for it to reduce its cost base.<\/p>\n
“Maintaining a listing in the US is expensive and takes considerable management time,” the group said.<\/p>\n
Reuben September, Telkom chief executive, said in a statement : “We have managed to conclude the Vodacom transaction at an exceptional price, given the market conditions.<\/p>\n
“We have also concluded the sale of our 75percent stake in Telkom Media to Schenzen Media, taken our shareholding in Multi-Links (Nigeria) up to 100percent and acquired M-Web Africa (including AFSAT) from Naspers.”<\/p>\n
Dobek Pater, Africa Analysis telecommunications analyst, said Telkom’s profitability would have been even further reduced without Vodacom.<\/p>\n
“The problem is that the fixed- line market is losing market share to increasing competition,” he said. “It’s a global phenomenon, where fixed-line operators are having to decrease tariffs, but not necessarily seeing an increase in usage.”<\/p>\n
To replace Vodacom, speculators have said that Telkom might want to acquire Cell C, but Pater said Cell C was not a magic pill as it was still saddled with huge amounts of debt and struggling to compete against Vodacom and MTN in South Africa.<\/p>\n