Telkom’s board of directors is considering the option of impairing the carrying value of the group’s legacy networks.
A non-cash impairment charge may follow if the board decides to do this, Telkom says. This would not affect the significant cash flow it generated from its operations and would have no impact on the group’s cash position, low indebtedness and ability to fund its capital programme from its own resources.
The size of the non-cash impairment charge cannot be confirmed at this stage, Telkom says. The group is therefore not yet in a position to provide guidance in terms of earnings for the full financial year. Telkom is expected to report its full-year results to March 2013 next Friday.
“Telkom, in line with other fixed-line incumbents globally, has for more than a decade faced technology changes, competition from mobile operators and an evolving regulatory landscape, which have contributed to lower investment returns from its legacy network assets,” it explains.
“The group continues to invest significant capital into upgrading its fixed and mobile network to meet the increasing needs of customers, particularly regarding data transmission.
“The migration of services from legacy assets to superior Internet protocol-compliant assets will rapidly escalate over the next few years to ensure that services remain differentiated from competitors and competitively priced. This transition will also enable the group to improve operational efficiency, as this is a major benefit of new technology.” — (c) 2013 NewsCentral Media
- Developing story … more to follow