TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentral TechCentral
    NEWSLETTER
    • News

      SABC drags SuperSport to the Competition Commission

      7 July 2022

      Data suggests South African start-up exit size shrinking

      7 July 2022

      France’s Canal+ takes MultiChoice stake to 20%

      7 July 2022

      Huge Group to acquire what was Virgin Mobile in South Africa

      6 July 2022

      TechCentral needs your feedback – 2022 reader survey now live

      6 July 2022
    • World

      FBI accuses China of trying to ‘ransack’ Western companies through hacking

      7 July 2022

      Clear signs of trouble ahead for the global tech industry

      7 July 2022

      Elon Musk had twins last year with Shivon Zilis, one of his top execs

      7 July 2022

      China accuses US of ‘technological terrorism’

      6 July 2022

      Apple devices to get ‘Lockdown Mode’ to fight spyware

      6 July 2022
    • In-depth

      The bonfire of the NFTs

      5 July 2022

      The NFT party is over

      30 June 2022

      The great crypto crash: the fallout, and what happens next

      22 June 2022

      Goodbye, Internet Explorer – you really won’t be missed

      19 June 2022

      Oracle’s database dominance threatened by rise of cloud-first rivals

      13 June 2022
    • Podcasts

      Demystifying the complexity of AI – fact vs fiction

      6 July 2022

      How your organisation can triage its information security risk

      22 June 2022

      Everything PC S01E06 – ‘Apple Silicon’

      15 June 2022

      The youth might just save us

      15 June 2022

      Everything PC S01E05 – ‘Nvidia: The Green Goblin’

      8 June 2022
    • Opinion

      South Africa can no longer rely on Eskom alone

      4 July 2022

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022

      A proposed solution to crypto’s stablecoin problem

      19 May 2022

      From spectrum to roads, why fixing SA’s problems is an uphill battle

      19 April 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»News»Huge Group grows, but uncertainty lingers

    Huge Group grows, but uncertainty lingers

    News By Editor1 June 2010
    Facebook Twitter LinkedIn WhatsApp Telegram Email
    James Herbst

    AltX-listed Huge Group has posted a strong turnaround in its fortunes in the past six months, converting a R5,9m loss in the six months to 31 August 2009 into a profit for the full year to 28 February of R8,1m on revenues that fell from R608,5m to R573,5m.

    The group has done this, it says, by improving operational efficiencies and focusing on lifting gross profit margins. “The focus of the group for the coming year will be to translate the improved operational efficiencies and higher gross profit margins achieved by Huge Telecom into increased profit margins at group level,” it says.

    The results, however, do not reflect the reduction on 1 March in wholesale mobile termination rates — the fees the mobile operators charge one another and other operators to carry calls onto their networks. Companies like Huge Group, which provide least-cost routing solutions to corporate customers, are likely to take the full brunt of a reduction in the rates.

    However, in notes accompanying the financial results, Huge Group says it also “stands to benefit from the regulatory reduction in termination rates”.

    It says the reduction will put pressure on voice-over-Internet Protocol (VoIP) service providers. It says a plan by industry regulator, the Independent Communications Authority of SA (Icasa) to reduce termination rates on fixed-line networks — possibly by as early as next month — could “post an imminent threat to least-cost routing companies in Huge’s peer group that invested heavily in recent years to build VoIP infrastructure”.

    “While these players may have briefly enjoyed additional revenue streams on incoming voice traffic, their investments are at risk of being rendered unprofitable long before their expected break-even point if the proposed lower fixed-line termination rates come into effect in July 2010,” the group says.

    “Huge Telecom’s strategic decision not to adopt a VoIP-dominated business model has meant that its economic viability will not be affected by these possible changes.”

    To deal with the threat posed to its least-cost routing business, the group says that in the year ahead it will focus on introducing “alternative revenue streams that complement its business”. It doesn’t disclose the likely financial impact of the reduction in termination rates on 1 March, or the likely impact of future rate cuts.

    Huge Group CEO James Herbst told TechCentral in an interview last year that there were “mitigating factors to the risks” posed by lower termination rates. “We’re not putting our heads in the sand and saying least-cost routing is not under threat. What we’re saying is the business model may change,” he said. “We may have to reinvent ourselves, but we can do it a lot quicker than people think.”

    In the 2010 financial year, Huge Telecom, the group’s largest subsidiary, reported an 11,8% increase in gross profit margins, improving from 18,6% to 20,8%. This was achieved through better management of input costs. Notably, Huge Telecom created a revenue assurance department to enhance the management of airtime available for sale. As a result, it says airtime lost due to expiry was reduced dramatically.

    For the 2011 financial year, Huge Group says it will continue to focus on improving efficiencies. It also wants to lift revenue in its new Huge Media division, which, through the Eyeballs Mobile Advertising operation, develops a proprietary advertising platform for mobile phones. It plans to take this offering to international markets, it says.  — Staff reporter, TechCentral

    See also:

    • Huge Group turns in a shocker
    • Huge Group hits back over fee claims
    • Subscribe to our free daily newsletter
    • Follow us on Twitter or on Facebook
    Huge Group James Herbst
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleNo easy answers in content debate
    Next Article Telkom offers way to fix pay disparities

    Related Posts

    SABC drags SuperSport to the Competition Commission

    7 July 2022

    Data suggests South African start-up exit size shrinking

    7 July 2022

    France’s Canal+ takes MultiChoice stake to 20%

    7 July 2022
    Add A Comment

    Comments are closed.

    Promoted

    Following its acquisition by Schwarz Group, XM Cyber buys Cyber Observer

    7 July 2022

    Hot Ink certifies and diversifies to maintain competitive printing edge

    5 July 2022

    Increased flexibility with Dell Precision Mobile Workstations

    5 July 2022
    Opinion

    South Africa can no longer rely on Eskom alone

    4 July 2022

    Has South Africa’s advertising industry lost its way?

    21 June 2022

    Rob Lith: What Icasa’s spectrum auction means for SA companies

    13 June 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.