8ta, has greatly increased its subscriber numbers, but Telkom’s mobile arm continues to cost the operator billions of rand a year.

The number of active 8ta mobile subscribers for the financial year ended March 2012 increased by 213,2% to 1,5m, with total subscribers now numbering slightly over 3m, 154,5% up on the previous year.

Worryingly, prepaid churn was 58,9% of its user base. Of its active users, more than 1m are prepaid with postpaid accounting for roughly a third at 443 953.

Blended average revenue per user (Arpu) for the period was R68,86. Arpu for prepaid customers rose to R20,89 for the period — up 31,7% — while postpaid Arpu declined by 13,3% to R206,83.

8ta turned in a loss before interest, tax, depreciation and amortisation of R2,2bn. Telkom’s group headline earnings per share declined 33%, which Telkom says is “mainly as a result of the investment made in our mobile business”.

The mobile operator, which generated revenue of R1,2bn, has 1 316 active towers and Telkom says it now fields 51% of its mobile voice traffic and 85% of its mobile data over its own infrastructure. The group wants to become the industry leader in fixed-mobile convergence, both in its retail consumer and business operations.

It says it remains “committed to the mobile business and, although tactics may change from time to time, the broader strategy to defend erosion in our fixed-line business while growing converged delivery channels to our customers remains a key priority”.

It adds that meeting the growing demand for data in SA “is a core feature of our mobile strategy and it is essential that this be done in such a way that it does not lead to cannibalisation of our other services. Instead, we must offer services that reward the customer for using Telkom’s products with varying levels of incentives, depending on the customer’s level of loyalty.” — (c) 2012 NewsCentral Media