Revenue from “next-generation network” (NGN) services, including fibre and LTE, now account for more than four-fifths of Telkom’s group revenue, the telecommunications operator said on Monday.
In a trading update for the three months to end-June 2024, Telkom said it reported a nearly 4% improvement in group revenue to R10.9-billion, lifted by a 7% uplift in revenue from NGN services.
Group Ebitda – earnings before interest, tax, depreciation and amortisation, a measure of operating profit – jumped by 24.1% to R2.8-billion, it said. This was driven higher by a 35.7% leap in mobile Ebitda to R1.5-billion in the quarter.
However, despite the growth in NGN services, overall revenue still declined by 2.4%, mainly driven by a decline of 28.4% in voice and legacy revenue.
Telkom has accelerated its shift away from legacy access technologies such as copper-based digital subscriber lines in recent years, shifting its customer base onto faster and more reliable fibre-to-the-home and wireless-LTE services.
“Telkom had a good start to the financial year with pleasing performance on the top line benefiting from our data-led strategy and compelling value propositions,” said CEO Serame Taukobong in notes accompanying the trading update.
“Our next-generation revenue streams continued their positive momentum and grew by R576-million, an increase of 7%. NGN revenues now comprise 80.7% of group revenue,” he said.
Mobile, fibre
“NGN broadband offerings, enabled by our ongoing capital investment in our mobile and fibre networks, have positioned Telkom advantageously as the best-value mobile network while the connect-led strategy for our fibre network further improved the market-leading home connection rate to 49% for the quarter,” Taukobong said.
“These capex investments give our networks the capacity to accommodate and handle high data traffic demands from our retail and enterprise customers, on already existing mobile and fibre infrastructure.”
Group Ebitda margin expanded by 2.3 percentage points compared to the March 2024 full-year number, driven by top-line growth and “stringent” cost management.
Telkom added 14.6% to its mobile subscriber tally year on year and topped the 21 million mark for the first time. Homes connected with fibre grew by almost 20% year on year.
In fibre, the number of homes passed increased by 13.4% to 1.26 million homes, while growth of 19.5% in the number of homes connectivity improved Telkom’s market-leading connectivity rate, which now stands at 49%. This means that one in two homes that Telkom’s wholesale subsidiary Openserve passes with its fibre infrastructure is connected to the network.
Revenue at BCX, the IT services company, increased by 2.4% to R3.2-billion on the back of strong performance in the IT hardware and software business. – © 2024 NewsCentral Media