Telkom now ‘solidly’ SA’s number three mobile operator after Covid-19 bump

The company says its number of active mobile subscribers rose almost a fifth in the six months to end-September

Telkom CEO Sipho Maseko
Telkom CEO Sipho Maseko

Telkom’s growth rate in subscribers has seen it firmly overtake Cell C as SA’s third-largest mobile operator, with the Covid-19 pandemic helping deliver a surge in revenue from this business line in its six months to end-September.

Cell C is struggling under a debt burden of about R9.7bn and its subscriber base fell about a third in the first half of 2020.

Telkom said on Tuesday it was now “solidly” number three, behind Vodacom and MTN.

Telkom has been focusing on its mobile business as technological changes put pressure on its traditional fixed-line services, saying this paid off in 2020, when the Covid-19 pandemic boosted demand for data as people started working from home.

The company said active mobile subscribers jumped 19% to 13.7-million to end-September, while prepaid subscribers jumped 17.9% to 11-million.

Cell C reported in July that its prepaid subscriber base fell more than a third in its six months to end-June to 8.35-million. Total subscribers fell 28% to 11.7-million in the first half of 2020.

Telkom said revenue from data and mobile helped offset pressure on its other business, with revenue from mobile services jumping 47.8% to R8.28bn to end-September. Group revenue fell 0.4% to R21.39bn.

Earnings before interest, taxation, depreciation and amortisation (ebitda), a measure of underlying operational profit, rose 6.3% to R8.9bn, with the group saying it was focused on cash preservation during the pandemic.

Telkom incurred R81m in Covid-19-related expenses since the beginning of the national lockdown, but cut its capital expenditure by 30.6% to R2.94bn.

“Our group performance for the six months was sturdy in the face of an unprecedented pandemic, where some of our corporate customers ceased operations and those who continued operating did so under severe financial pressure,” said group CEO Sipho Maseko.

“We weathered the Covid-19 storm and completed the first half of the year with improved profitability, strong liquidity and a strengthened balance sheet,” Maseko said.

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