Telkom, South Africa’s biggest fixed-line telephone group, on Monday posted a 12.4% rise in headline earnings per share (HEPS) to 731.4 cents per share for the year to end March 2017, bolstered by the growth of its mobile phone unit. HEPS is South Africa’s main profit gauge.
Operating revenue was up 9.8%to R41.0 billion, boosted by the full consolidation of BCX in the year, along with the solid performance of Telkom’s mobile business.
Telkom informed investors on Monday that its mobile business continued to be the star performer, and delivered service revenue growth of 38.4 percent and EBITDA of R660 million over four years of recording EBITDA losses.
“This was a result of an expansion in our network, extension of our distribution channels and the launch of innovative products,” Sipho Maseko, Telkom’s CEO, said in a statement.
Telkom accelerated investment in mobile investment as it re-farmed its 1 800 MHz spectrum to expand its LTE services to smartphones.
“We invested in our mobile network by expanding the number of integrated base stations by 12.1 percent to 2 986 and increased capacity in existing sites to cater for the increase in data traffic growth,” said Maseko.
Results were boosted also by customers increasingly using their mobile devices to play games, trade binary options, schedule their days, meditate and more.
The mobile business recorded service revenue growth of 38.4%, and the company attributed this to an increase in the active subscriber base as result of an expansion in its network, extension of its distribution channels, increased store footprint and innovative products launched during the year, such as FreeMe (for individuals) and FreeMe Family (for families and small businesses), which are primarily data offerings.
The company said as a result mobile business active subscriber base grew by 47.7% to 4 million with a blended average revenue per user (ARPU) stable at R89. Post-paid subscribers rose 54.5% to 1.2 million with an ARPU of R181 supported by FreeMe.
The telco said its post-paid subscribers, 13 percent use FreeMe, of which 79% are new customers.
“Our mobile broadband led strategy delivered a strong performance with mobile data revenue increasing 49.6% to R2.4 billion supported by an increase of 44.6% in mobile broadband subscribers to 2.6 million. Following the re-farming of our 1 800 MHz spectrum to extend our LTE offering to smartphones, we observed a good growth of 45.7% in our smartphone base to 1.9 million,” the company said.
Telkom also continues to invest in modernising and expanding the network of Openserve.
The Openserve network now passed more than 2.2 million premises with fibre. “This was underpinned by an increase in capital investment, improved efficiencies in network roll-out, and more streamlined processes,” the company said.
The number of homes passed by fibre increased by 169.7% to 219 825 homes.
Telkom also increased the number of fibre end-point connections to businesses to 52 755. It also increased the number of fibre links to base stations to 5 928, which provide services to mobile players.