Telkom forecasts strong mobile growth

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Telkom. Picture: File
Telkom. Picture: File

Telkom is expecting its mobile unit to demonstrate strong growth as its mobile plans and the investment in its mobile network pay off.

This according to Telkom CEO Sipho Maseko, who this week reported the company’s mobile subscribers had jumped by 50% from a year ago to 6.5 million at the end of September.

The company’s mobile broadband subscribers shot up by 67% to 4.8 million and mobile broadband data volumes rocketed by 121% to 159 petabytes.

However, he said during an interview with City Press that it would be difficult for Telkom to maintain such strong mobile subscriber growth.

“I’m not sure if we can continue to hold on to these higher levels of growth. I’m sure our competitors will respond – hopefully they will bring prices down.”

Telkom could achieve annual mobile subscriber growth of 30%, he said, adding: “I’d take that any day in this economy.”

Maseko attributed the group’s mobile growth to investment in its mobile network.

“Our investment has largely focused on building a data network rather than a voice network. So that has been very crucial. We have obviously evolved the right propositions around unlimited and uncapped data. We have provided flexible pricing, our tariffs are simpler.

“The team has not been afraid to try things. When things work, great, and when things don’t work, change things. All things have come together to give us a solid mobile performance,” he said.

Maseko said the outlook for mobile broadband subscribers remained strong, driven by a number of variables.

“Firstly, we will continue to migrate our customers from legacy technology, especially on the fixed broadband side which is low speed, away from ADSL, either to mobile broadband or to fibre.

“The demand for data, even with 58% smartphone penetration, is one of the things that is driving so much of our revenue growth. You can imagine that we are going to start hitting 70% penetration as device costs come down [because] the demand for data will increase.”

He said once video becomes more pervasive, the telecommunications companies that have optimum networks will win.

“The approach we take is that voice is finite, while data is infinite. Now we are about to get into video.”

The local fibre sector, which has so far attracted a number of players, is ripe for consolidation, Maseko said.

“Consolidation is inevitable,” he added.

Government is looking to sell its extra telecommunications spectrum next year as part of plans to boost economic growth.

Maseko said that Telkom was advocating for ‘equitable distribution of spectrum’.

“We continue to say that the auction should not be the be all and end all of what we want to do. It should also drive a particular market structure. Our view is that if you really want data prices to come down, if you really want to see more competition. Use the spectrum as one of the instruments to make sure there is more competition. Use it to balance the competitive environment.”

“There must be an administrative process of allocating spectrum rather than just leaning on an auction.”

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