Telkom’s aggressively priced FreeMe mobile plans have proved to be a huge hit for Telkom, the telecommunications operator said on Tuesday.
In the six months to 30 September 2016, Telkom’s mobile voice and subscriber revenue increased by 30% to R520m on the back of a 42% increase in the number of active mobile subscribers and resulted in the mobile business contributing positively to group Ebitda for the first time since its launch. (Ebitda, a measure of operating profit, is earnings before interest, tax, depreciation and amortisation.)
“The splendid performance in our mobile division was assisted by the complete overhaul of our mobile product offering in the form of FreeMe, the launch of new stores and sales channels as well as competitive products and pricing such as deal-of-the-month campaigns,” said Telkom CEO Sipho Maseko.
The FreeMe plans offer customers a data bundle with voice, WhatsApp calls, text for free and free Wi-Fi. The plans have “performed even better than our initial expectations”, said Maseko. “We saw increased gross connections from both existing customers and new-to-franchise customers.”
In the six-month period, Telkom sold about 170 000 prepaid FreeMe bundles.
“Our mobile business has been able to establish itself as a meaningful player in the market. We intend growing our scale in the mobile market through focusing in the post-paid and data markets in which we are already making inroads,” said Maseko.
Key highlights of Telkom’s interim results include headline earnings per share of R3,36, up 20% on a year ago, and an interim dividend of R1,31/share.
“Telkom delivered a solid performance in a tough economy where businesses continue to operate under pressure. The consolidation of Business Connexion, as well as the satisfactory performance of the company’s mobile business, drove revenue performance during the six months,” the company said.
However, the fixed-line business is proving to be a headache. Fixed-line voice usage and subscription revenue decreased by 4% to R7bn. Telkom has blamed competition, mobile substitution, a 7% decline in the number of lines and customers migrating to lower-value bundled offerings for the weak number. — © 2016 NewsCentral Media