JSE-listed Telkom remained under pressure during the year ended March 31, 2022, with underlying earnings before interest, taxes, depreciation and amortisation (Ebitda) contracting 0.5% to R11.9-billion.

The group’s Ebitda margin expanded by 0.2 percentage points to 27.9% during the year under review.

The stable Ebitda was supported by sustainable cost management despite challenges in revenue, which declined 1.1% to R42.75-billion, the company said in a statement to shareholders on Tuesday.

Notwithstanding the challenging operating environment that persisted in the year to March 31, 2022, Telkom grew its earnings with underlying headline earnings a share and basic earnings a share increasing by 2.5% and 1.4%, to 575.3c and 536.6c respectively.

The group’s revenue was supported by the growth in the mobile business, offset by the decline in the fixed and information technology businesses, which remain under pressure owing to the challenging operating environment and as customers migrate to modern technologies such as fibre and long-term evolution.

Although these businesses' top-lines declined compared with the prior year, the rate of decline improved compared with the first half of the year, the group pointed out.

“Openserve increased fixed data revenue by 5.5%, largely driven by the growth in carrier links. Over the period, an increase of 16.6% in fixed data consumption was seen across the network with an increase of 52.7% in the number of homes passed at a connectivity rate of 46.3%,” Telkom said in a statement.

Telkom Group CEO Serame Taukobong noted that this was in line with the company’s strategy of accelerating the fibre-to-the-home footprint while simultaneously focusing on connecting homes.

“In the second half of the year, overall fixed broadband subscribers increased for the first time in several years despite the decline in ADSL subscribers,” he said.

Telkom Mobile increased its customer base by 10.5% to 16.9-million subscribers with 62.9% of the base using broadband services.

“As part of Telkom’s fifth-generation (5G) strategy, Telkom targets to maintain a fibre backhaul ratio between 70% to 80%. As at the end of the 2022 financial year, 68% of our base stations had fibre backhaul. The 22 MHz of 3 500 MHz acquired in the recent spectrum auction enables Telkom 50 MHz on contiguous spectrum to deploy 5G on our mobile network,” said Taukobong.

Meanwhile, masts and tower business Swiftnet is expanding the range of products and preparing for the implementation of 5G by its clients.

“Over the period, masts and towers delivered revenue of R1.3-billion, an increase of 4.4% from the prior year, with an Ebitda margin of 70.4%. The Ebitda was impacted by a refined methodology of allocating property costs in the second half of the year. On a normalised basis, Ebitda increased by 2.7% to R1.02-billion at a margin of 79.0%.”

While BCX remains challenged with revenue declining 2.6%, converged communication stabilised with exceptional growth in cybersecurity, Internet of Things solutions, innovation and technology albeit from a lower base.