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    Home » News » Shares soar as Telkom pares mobile losses

    Shares soar as Telkom pares mobile losses

    By Duncan McLeod31 July 2015
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    Sipho Maseko
    Sipho Maseko

    Telkom’s share price has leapt by almost 8% to R61,48 after it provided a positive quarterly update for the three months ended 30 June 2015. The quarter is the first of Telkom’s financial year, which ends in March.

    It said that in the three months, net revenue rose by 1,7% to R6,5bn. It did not provide any group earnings numbers.

    What it did say was that net revenue from mobile soared by 68,5% in the quarter to R350m, driven mainly by demand for data.

    Significantly, and probably underpinning the sharp upward movement in Telkom’s share price on Friday was news that Telkom Mobile incurred a loss of just R30m in the quarter. “This is an 87,9% improvement compared to the prior comparative period,” Telkom said.

    Active mobile customers increased by 11,7% to more than 2,1m, with a blended average revenue per user of R82,87, up by 17,8% on a year ago.

    Post-paid customers grew by 61,9% while prepaid customers decreased by 1,3%. The reduction in prepaid customers was due to a clean-up of the revenue-generating subscriber base, Telkom explained.

    In fixed lines, the number of ADSL broadband customers grew by 6,3% on a year ago and remained above a million at the end of the quarter. There was a 31,5% increase in ADSL traffic volumes. Fixed-line subscriptions revenue climbed by 9,2%. However, fixed-line usage revenue fell by 13,7%.

    There was a 14,5% slump in leased-line and high-capacity connectivity revenue. IT business services revenue increased by 18,7%.

    “Our net revenue for the first quarter of our financial year grew by 1,7% in a difficult operating environment during which there were significant pricing pressures,” said CEO Sipho Maseko in a note to shareholders. “We continued to focus on data and mobile revenues, which remain the key drivers of our revenue growth.”

    Capital expenditure in the quarter was R730m, up by 15,3% over the same period a year ago. The main focus of this investment was on an accelerated fibre roll-out and increased investment in mobile, especially 4G/ LTE.

    Other telecoms stocks on the JSE had a good showing on Friday, too. MTN closed up by 2,4%, ending the session at R211/share. The group will report interim results on Wednesday. Vodacom ended the session up by 3,2% at R146,56/share, despite the scandal involving alleged kickbacks that has erupted at acquisition target Neotel.  — © 2015 NewsCentral Media



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