Telecommunications group Telkom plans to take over rival Cell C’s position as South Africa’s third-largest mobile operator, while taking the lead in the broadband sector.
Telkom’s embattled capital-intensive mobile arm, which had contributed to continued drag on the group, aimed to become the number-three player in mobile, and accelerate the unit’s break-even and cash flow.
In a presentation emerging from an investor day, in Pretoria, on Monday, COO Dr Brian Armstrong said the company planned to be a “customer advocacy leader in South Africa’s consumer market”.
Telkom Mobile had improved on its loss before interest, tax, depreciation and amortisation by 20% to R1.3-billion in the year ended March 31, while reporting a reduced capital expenditure of 12% at R1.37-billion.
The group’s subscriber base jumped 18%, with “dramatic” improvements in customers’ experience.
“We are well positioned for where the market is moving to, but we need to manage exponential data growth carefully,” Armstrong said, as the mobile unit continued “derisking” the business, with MTN set to take over the financial and operational responsibility for the roll-out and operation of Telkom’s radio access network.
Telkom Mobile eyed a significant percentage of revenue from bundles, content and value-added products.
The company also had 1 200 long-term evolution (LTE) base stations on air, 2 500 active third-generation (3G) sites and 2 426 WiFi access points, and was planning to connect 1.5-million homes to fixed-line and LTE technologies by 2019 as it moved to gain the position of number one broadband provider in South Africa.
“Telkom intends to be the broadband leader in South Africa, whether at home or work, [or on-the-go],” he said.
In line with this, an integrated broadband plan was developed to ensure Telkom “successfully achieved” leadership in broadband.
The plan considered three key aspects, namely user behaviour such as location, device, ability to pay and use type; as well as the value propositions of speed and data capacity, additional features and pricing; and the technology to serve the demand, including 3G and LTE mobile and fibre-to-the-home (FTTH), besides others.
In June, Telkom announced plans to roll out FTTH connectivity to over 20 suburbs, with the commercial launch of basic voice and broadband FTTH and fibre-to-the-building to enable the sale of up to 100 Mb/s digital-subscriber lines by October.
Currently, Telkom, which targeted coverage of 23 suburbs by December, had rolled out fibre passing 1 733 homes, with 25 000 homes expected to be passed by March 2015.