Telkom Mobile, Telkom's four-year old cellular entity, grew its subscriber base 17.6% in the year to March.
The entity, which had been burning cash and running at a loss, now has 1.8 million active customers. Addressing media and analysts at the company's results presentation, acting CFO Deon Fredericks said the unit's financial position was improving.
Fredericks noted its earnings before interest, tax, depreciation and amortisation loss had narrowed by 20% from last year, to R1.3 billion. He said the company is happy with the unit's performance as it is gaining traction. Telkom is in the midst of a deal with MTN that will see MTN take over Telkom's towers and allow both entities to roam on each other's networks.
However, the bid - which CEO Sipho Maseko anticipates will be wrapped up by the end of next March - is subject to regulatory approval, including from the competition authorities and the Independent Communications Authority of SA.
During the year, Telkom grew its base station base to 2 592, an increase of 12.7%. Its decision to merge its towers with those of MTN is a bid to derisk the business and stop pumping money into infrastructure.
Telkom explains MTN will take over financial and operational responsibility for the rollout of Telkom's radio access network equipment, but the networks will be independently configured.
Mobile capital expenditure dropped 11.6% to R1.4 billion as Telkom shifted its focus to a more concentrated deployment in the four major metropolitan areas. Overall, capital expenditure was R6.5 million.
Revenue from Telkom's mobile operations gained 72.7%, yet mobile voice and subscriber revenue decreased 20.4%. "This can be attributed to the expiry of bulk hybrid contracts and a clean-up of our debtors' book which has resulted in an improved quality of our customer base," says the telco.
Telkom noted lower postpaid voice revenue was partially offset by gains in prepaid, growth of its subscriber base and higher average revenue per user. Overall average revenue per user gained 4.1% to R62.79.
"Enticing data deals and promotional products" led to an increase in data subscribers, and a 80.2% increase in mobile data revenue to R656 million, says Telkom. Mobile handset and equipment sales revenue increased 271.2% to R1.1 billion, driven by higher bulk sales to dealers and a sharp increase in smartphone and tablet sales, it notes.
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