Shares in fixed-line operator Telkom soared more than 7% during the course of the day as the group reported a strong full-year performance to end-March, boosted by continued demand for and growth of its next-generation offerings such as data.
The group’s “data-led strategy delivered ahead of industry trends as we grew mobile service revenue by 6.8% and surpassed 20-million mobile subscribers”, the company said in a statement on Tuesday.
CEO Serame Taukobong is confident Telkom will be able to maintain its growth trajectory and momentum.
“It’s what I’ve been saying for quite some time. It’s very important for us not to see market share in terms of SIM [card] share but more importantly revenue share. Because what we are seeing now is growth in terms of data revenue share and ... that’s where the growth is coming from,” he said during an investor presentation at the JSE.
SA, with a population of 60-million, has more than 110-million SIM cards.
“The market is swinging quite significantly now to data usage and that’s where the Telkom Mobile value proposition has been, that it has been a data driven organisation,” Taukobong said.
Telkom’s growth is seen as slowly eating away at Vodacom and MTN’s market share. The Telkom boss said this was mainly an issue of the state-affiliated company growing its share of data revenue across the industry.
“Where we’re getting close in terms of our market share growth is looking at share of data and share of data revenue which is where the big indicator for us is. The market, at SIM level, seems flat.”
Annual revenue was up 1.6% at R43.2bn, with next-generation revenue rising 7% to R34.5bn. Group earnings before interest, tax, depreciation and amortisation (ebitda) were 5.2% higher at R10bn and headline earnings per share (heps) trebled to 376c from 124.8c.
Our data-led strategy delivered ahead of industry trends as we grew mobile service revenue by 6.8% and surpassed 20-million mobile subscribers
The group reported a profit after tax of R1.88bn after a loss of R9.97bn the year before, boosted by the non-recurrence of one-off restructuring costs and lower depreciation.
By market close Telkom’s share price was up 3.31% to R25.
“Openserve’s leading fibre connectivity rate advanced to 48.5% as we prioritised monetising our fixed network and passed more than 1.2-million homes with fibre,” the company said.
BCX made good strides in growing its IT service revenue, and Swiftnet’s tower rollout programme and tenant growth further contributed to revenue growth and margin expansion for the group.
During the year, the company invested R6.1bn towards network resilience, expanding the mobile network, modernising its fixed network infrastructure and fortifying its skills and capabilities for ICT-managed services.
The group, now worth R12.96bn on the JSE, made progress in delivering on its strategic imperative to unlock value through the proposed disposal of Swiftnet for R6.75bn. The transaction was presented to and approved by shareholders on May 24.
With the proposed disposal of Swiftnet, the group’s future areas of growth have been brought into focus as it enters its next phase of monetising Telkom’s existing and future digital infrastructure as an InfraCo. This will entail efficiently investing in its mobile and fibre network businesses while expanding its ICT capabilities anchored by data centres (own and through partnerships) as a base from which to grow the IT-managed services offering.
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