Fixed-line operator Telkom reported a net profit of R222 million in the first half of the year to September - down from R233 million a year ago.
However, the telco said its pre-tax profit was hammered due to a provision for a Competition Tribunal penalty, as well as higher staff costs.
Telkom was this year fined R449 million for abusing its monopoly between 1999 and 2004, but has lodged an appeal against the fine.
Revenue declined 1.5%, to R16.5 billion, while group operating expenses increased 1.6%, to R15.6 billion, the bulk of which was due to the group's fixed-line business, where voice revenue continued to slow.
Profit before tax came in at R547 million, some R523 million, or 48.9%, lower than the first half of last year as the group reported annual salary increases, lower fixed-line revenue and the provision for the fine. These issues were partially offset by lower mobile termination rates and no impairment charge.
"Revenue continues to reflect the impact of fixed mobile substitution that has become more prevalent over the last few years being partially offset by growth in revenue from our own mobile offering and limited revenue growth in fixed-line data," says Telkom.
It adds that lower prices on data because of competitive offerings continue to negate the volume growth experienced in the fixed-line data area. ADSL subscribers increased 5.8%, to 841 831.
Telkom reported free cash flow of R1.5 billion and said its mobile arm, 8ta, had almost 1.5 million active subscribers.
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