Telkom's loss-making mobile arm is set to break-even sooner than expected, but Telkom has declined to give a time frame for when this will happen.
COO Brian Armstrong says he is happy with the mobile unit, and it looks positive for growth moving forward. However, he would not provide guidelines for its growth prospects for the second half of the year. He says it will "break-even sooner than later".
The mobile arm, which launched as 8ta four years ago, now has just over two million subscribers, a year-on-year gain of 26.7%. In 2011, Telkom pushed out the timeframe for what was then 8ta to break-even on an operating profit basis by a year, to 2014, and expected it to only be cash-generative in 2015.
Its break-even target is now the current financial year, which ends next March.
Telkom Mobile's users are spending an average amount of R71.99 a month, and it has integrated 2 473 base stations, a 10.5% increase, of which 1 275 are long-term evolution sites.
In the six months to September, the mobile unit grew revenue 55% to R1.4 billion and improved its earnings before interest, tax, depreciation and amortisation, reducing the loss by 50.7%. It did not disclose the loss.
Telkom is still seeking to conclude its deal with MTN - to extend its bilateral roaming agreement - this year. The move will see MTN handle Telkom's radio network equipment and is a bid to stem the amount of money the operator needs to invest in its network. "Although this is not a complete solution for our mobile business, it represents a step in the right direction," says Telkom.
In the interim period, Telkom invested R164 million in its mobile network, an amount CFO Deon Fredericks says will double by year-end. Once the deal is done, MTN will take financial and operational responsibility for the network.
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