Telkom, which today turned in its six-month figures, is set for major changes over the next six months as it sheds its Vodacom shareholding and prepares to offer new services in both South Africa and Africa.
Telkom has grown operating revenue for the six months ended 30 September by 9,8% to R29,9-billion, but operating profit declined 9,3% to R6,7-billion.
During the period, EBIDTA decreased by 2,8% to R10-billion, while the group EBITDA margin decreased from 37,7% to 33,4%.
However, cash generated from operations increased by 0,5% to R8,3-billion, and headline earnings per share increased by 0,4% to 745.2 cents per share.
Reuben September, CEO of Telkom, comments: "Despite the difficult market conditions the Telkom Group delivered a pleasing 9,8% growth in revenue to R29,884-million.
"Vodacom once again delivered a strong performance with revenue increasing 14% to R26-billion and customers increasing 13,1% to 35,7-million.
"We are proud of the fixed-line's revenue growth of 2,8% to R16,565-million. The fixed-line has become a preferred provider in the data market as a result of superior quality and speed is evident in the strong growth in data revenues.
"Data revenues increased 12,2% to R4,459-billion."
He adds that the need for the repositioning of the fixed-line in today's extremely competitive environment is evident in the continuing decline in traditional voice revenues.
"Traffic revenues decreased 3% to R7,833-billion," September says. The fixed-line's strength in the data market and need to combat fixed-mobile substitution led to the board recommending to shareholders on November 6, 2008 the sale of 15% of Telkom's stake in Vodacom to the Vodafone Group and the further unbundling of the remaining 35% stake in Vodacom to Telkom shareholders.
"The consideration for the 15% stake in Vodacom is R22,5-billion less 15% of Vodacom`s net debt at September 30, 2008 being R1,55-billion. Shareholders are required to approve the sale to Vodafone, the unbundling of the remaining 35% and Telkom`s retention of 50% of the proceeds with the remainder being distributed to Telkom shareholders through a special dividend.
"I am excited about Telkom`s repositioning within the market," September says. "Our strength is our network, our corporate customer relations and our data solutions and we intend to utilise the proceeds to leverage this strength for the benefit of all shareholders.
"Our key focus areas are fixed-mobile convergence, data and content services and geographic expansion. We intend to accelerate the expansion of our network including the Next Generation Network, selectively build a mobile network and explore acquisitive opportunities.
"The ability to pull traffic back on to the fixed-line`s network through mobile service offerings and leverage the NGN for full convergence and high value add data
services will enhance Telkom`s core defend and grow strategy.
"The next couple of years will see exciting changes for Telkom and our ability to provide premium services to our customers. We remain committed to improving services to our customers and generating returns for our shareholders. This will require substantial investment in our network and dedication from Telkom's employees. We are firmly focused on becoming a leading ICT service provider in Africa."