Mobile boosts Telkom’s profits

Telkom announced a surprising increase to after-tax profits, thanks to stellar performance in the mobile space.

The partially-state owned telecoms provider revealed in their earnings report that profit after tax rose to R3.3 billion.

Telkom’s mobile magic

In the mobile space, they boasted eye-popping growth in active subscribers that increased revenue from this business stream by 58.3%.

“The significant growth in mobile service revenue was supported by an 85.9% growth in active subscribers to 9.7 million, as our affordable broadband-led proposition continues to resonate with customers,” said chief executive Sipho Maseko.

This impressive performance likely has a lot to do with their attractive pricing strategy of mobile data.

“Our pre-paid proposition continues to attract good quality subscribers demonstrated by a significant increase in pre-paid ARPU of 19.8% to R71,” Maseko added.

As a result, they plan to double down in the mobile space. Plans are in place to construct 2000 new signal towers in the next three years to extend their coverage.

On the other hand…

It was not all good news for Telkom, though. They saw a significant dip in one of their other key business areas: fixed-line broadband internet, specifically ADSL services.

Despite fairly aggressive marketing in this space, the number of fixed-broadband subscribers fell for the second consecutive year.

A dip to 847 650 from 974 181 means they shed more than 11 127 subscribers per month, on average.

Reports of customer complaints about poor after-sales and customer service are still common. With the huge rise of competition in this space, it is not too surprising their subscriber numbers are dipping.

Back in January, the company announced an initiative to improve the accessibility of its support to customers. This came about after reports that customers were blacklisted for non-payment even after canceling services.

While the decline could be linked to their poor reputation and the increased competiton, it is important to note their overall customer base for fast internet services, which include LTE, rose by 8.4%.

This suggests that people are merely abandoning aging copper-based internet solutions rather than Telkom as a service provider.