Voice business fast evaporating at Telkom - TechCentral

Voice business fast evaporating at Telkom

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Telkom’s fixed-line voice revenue has plummeted in the past year, falling by more than 13,4%, or almost R1,1bn.

In its financial year to 31 March 2015, Telkom reported fixed-line voice usage revenue of less than R6,9bn, down from R7,9bn a year ago.

The group has blamed a 9,6% decline in voice minutes, resulting from fixed-to-mobile substitution, as the reason for the decline.

It has also pointed a finger at the 4,9% decline in the number of fixed lines in service.

Despite being granted a five-year monopoly in the late 1990s to roll out millions of new lines, which it did, Telkom has been cutting the number of landlines in service for more than 10 years as consumers opt for more easily accessible and convenient — and often more affordable — mobile alternatives.

In the past year, the number of lines in service has fallen from 3,6m to 3,4m.

Fixed-line subscription revenue has helped offset some of the sharp decline in voice revenue. Subscription revenue grew by 2,5% to R8bn in the year to March 2015, up from R7,8bn. This was as a result of average line rental tariff increases of about 6%.

One bright spot in the fixed-line numbers was an improvement in the number of broadband digital subscriber lines in service. TechCentral reported earlier on Monday that Telkom cracked the 1m DSL subscriber barrier for the first time ever in its 2015 financial year.

However, revenue from data connectivity services decreased by 0,4% to R5,4bn, caused by a decline in Diginet and international private leased circuit revenue due to increased competition and migration to Metro Ethernet services.

With continued self-provisioning by other licensed operators, revenue from leased-line facilities remained under pressure and declined a massive 22%, to R1,4bn.

Mobile was a much better performer for Telkom in 2015. Mobile voice and subscriber revenue increased by 46% to R717m (R491 in 2014) as a result of a 21,2% increase in the number of active mobile subscribers and a 19,5% increase in blended average revenue per user.

Telkom reported a strong 50,6% increase in mobile data revenue to R988m.

IT services performed well, too. “We won some key strategic deals in the IT market, which boosted our IT business services data revenue by 82,4% to R633m,” Telkom said.

The group recently received a nod from the Competition Commission to proceed with its R2,7bn all-cash offer to buy IT services firm Business Connexion. The deal must still be green-lighted by the Competition Tribunal.  — © 2015 NewsCentral Media

7 Comments

  1. Nkosinathi Ngilambile on

    goes to show after-all you cannot forever protect yourself out of competition it will catch up eventually..

  2. maybe if they focused on actually maintaining their landlines and exchanges people wouldn’t go for mobile solutions. they can only blame incompetence within their company, not the economy or their mobile competitors

  3. Nick Watt Pringle on

    Don’t worry Telkom have increased their Land line rentals for private and business Lines in May 2015.
    The increase for a home line rental has jumped from R146.05 to R165.79 and a business line rental from R209.65 to R235.97. So if there are 4 million home lines and say 1 million business lines (those amounts are really low) R19.74 and R26.32 are the increases. times that by 4 million and 1 million users
    a month. Telkom has improved it’s bottom line with out doing “diddle squat” R105 058 000.00 per month. over the year R 1.263 billion on its bottom line.

  4. Barry Jackson on

    Maybe if the service levels and customer experience were better they would not lose as many customers. Since Telkom installed a new DSLAM? switch exchange in our area and closed the smaller exchanges we had repeated call outs for:
    * Every third call to our numbers was actually ringing – problem seems to be fixed at last
    * Calls where we could not hear the other person and they have had to call back(still happens)
    * Calls where the other end could not hear us and we have had to call again (still happens)
    * delay between when we pick up and other end hears us so that they miss the first part of our greeting them with the company name(still happens all the time)
    and it is not only us in this area a supplier of ours with an Alcatel Switchboard has the same problem. They are changing to a new switchboard and we are waiting to hear if it makes any difference.
    It is impossible to measure how much business is lost from this poor service compared to excellent line service we had before.
    We are already looking at routing part of our call via a VOIP Service provider and using less lines for incoming only.
    P.S. a technician came here 3 years ago and reported that the outside distribution box to the premises was corroded and long overdue for replacement and would report it but nothing has happened. Bit like the weeds and grass growing in the cracks in the road outside my house that the annual rains are happily penetrating and damaging the foundations of (the road not my house or at least I hope not).

  5. What I found interesting is how Telkom carefully avoided giving numbers on their VDSL roll-out. They mention a number like “964 196
    active
    ports” on their broadband network slide – but this can definitely not be VDSL as I am pretty sure that VDSL is not representative in the bigger ADSL numbers.

    Not only is voice declining, they cannot capitalize on the copper in the ground. Fiber is a great alternative to 4Mbps or below ADSL – the business case for a competitor deploying fiber in a 20+ Mbps VDSL area is much more difficult.

    I am wondering if Telkom is intentionally misleading shareholders on the status and progress of their VDSL network.

  6. The Emperor has no clothes... on

    Telkom’s consistently bad service and poor line quality (both voice and ADSL) in our area combined with their new ADSL line migration policy have pretty much guaranteed that they will soon be loosing another residential customer with 2 lines. #telkomfree

  7. Telkom often leaves large businesses without analog line repairs because they’re classified as “best effort” services and gives no options for SLAs due to this. Then they’re amazed that their voice service subscriptions are in decline. Go figure.

    BTW: 1 month and a week without service was the worst so far down here, anyone else have this problem?

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