Mobile Business Boosts South Africa’s Telkom Shares To Touch Record Highs – Market News Store

Mobile Business Boosts South Africa’s Telkom Shares To Touch Record Highs

Telkom of South Africa has hit record shares on Monday as the boost in its mobile business has offset the decline in its fixed-line units. There has been increasing investments from telecom groups across Africa as the usage of smartphone has been increasing and demanding more data and internet speed.

Telkom is 40% state owned and has the biggest fixed-line network in South Africa. The Telkom shares has seen a 13.6% increase in its share making it their record high since 2003. By about 1502 GMT, their stocks were up by 6.43% at 92.15 rand.They have been trying to make more customers to move from fixed line to wireless technologies as a means of transforming their business and starting their own mobile businesses. It has shown an 8.5% rise in EBITDA (earnings before interest, tax, depreciation and amortization) making $782 million (11.3 billion rand) and revenue has risen by 5.3%. A 10.6 billion rand had been expected by the analysts that were polled by Refinitiv.

Sipho Maseko, the Chief Executive said that there was an 85.9% growth in the number of active subscribers making it 9.7 million and this resulted in a significant increase in mobile revenue. The firm has been recently seen expanding their mobile phone networks and has been cutting down jobs thus rationalizing property portfolio.

Gyro, which is Telkom’s property management firm, has been planning to build towers for about 2000 sites over the span of three years from now. They have also said that 62 of their exchange properties would be decommissioned as they are not fit for operational purpose any longer. Telkom has said that through voluntary severance, early voluntary retirement as well as other layoffs,  about 12.5% of permanent jobs has been cut down making it 15,296. As part of their cost reduction strategy, there was a 13.4% drop in the number of permanent employees in Telkom’s communication and information technology business BCX making it to 5,782.

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