8ta 'behind budget'

Telkom's mobile offering, 8ta, is being well-received by the market, but its revenue is behind budget, the company says.

Telkom this morning published results for the six months to September and said 8ta, which launched about a year ago, made a R1.158 billion loss in the half year. This is a 464.9% increase from the loss it made in the first six months of 2010.

The mobile operator has signed up 2.2 million subscribers, although only 1.14 million of these are currently active. It has 882 888 contract customers and 257 407 prepaid users.

8ta, which generated revenue of R301 million, currently has a market share of 1.9%. Telkom expects it to own between 12% and 15% of the market by revenue by the 2015/16 financial year.

For the full year to March, the company expects to report an operating loss of R2.2 billion after stripping out inter-company eliminations.

Telkom says its disruptive data offerings have been well received and postpaid has performed strongly.

However, 8ta performed below target on prepaid and has battled to secure distribution channels due to lengthy negation. It has seen a slow network rollout and delays in tower sharing deals.

Telkom's short-term plans for 8ta are to improve distribution, ramp up marketing and communication, aggressively roll out its network, and leverage its fixed customer base.

“While the distribution network is still in the early stages of development in terms of scale, training and merchandising, we have secured a fairly wide distribution,” says Telkom.

8ta is available through 113 Telkom Direct Stores, six flagships stores, about 70 000 airtime points of sale, around 68 000 SIM card points of sale, and some 400 postpaid points of sale.

The company, which has a roaming agreement with MTN, has covered about 45% of the population with its own network and carries 43% of all voice traffic, while 84% of data traffic is carried on its own 8ta network.

“We have completed construction of 1 399 base stations of which 1 052 are on the air.” It is rolling out long-term evolution to 50 trial sites.