Telkom expected to pay a fine of between R8-million and R12-million for failing to meet government targets for new telephone lines, the telecommunications utility said on Monday.
Announcing its group results for the year ended March, Telkom said it missed the target of 2,69-million lines over five years by 16 448 — less than one percent.
The targets for new telephone lines to rural villages was missed by 505, and that for ”digitalising” all lines by 100 000, said Telkom representative Andrew Weldrick.
However, Telkom exceeded the target for installing new lines in under-serviced areas by 110 000, and for priority customers like clinics, hospitals, schools and police stations by 5 000.
The Independent Communications Authority would work out the fine, payable in the next financial year, Weldrick said.
Telkom reported an eight percent growth in revenue, and 15% in headline earnings per share.
Group earnings per share grew by 17%, and group operating cash flow by 16%, it said in a statement.
Telkom also reported an 18% growth in wireline data
revenue — which includes all fixed lines and directory services.
Wireless revenue — which relates to Telkom’s stake in Vodacom and wireless data company Swiftnet, grew by 25%.
”Our continual focus on driving greater capital and operating efficiencies, together with the strong growth of our wireline data and wireless business, enabled the group to deliver strong results for the year,” Telkom chief executive officer Sizwe Nxasana said.
”Now that our licence obligations are complete, we can drive the business in a direction that supports our strategy to deliver optimal operational and financial returns, and we believe that we have put the fundamentals in place to achieve this.”
Telkom’s licence obligations, which expired at the end of the financial year, included service quality and new installation targets.
Over the past year, Nxasana said, the company faced the challenge of balancing the last leg of its licence obligations with positioning Telkom for increased competition.
The utility also announced a nine percent increase in group operating expenditure. This was attributed to an increase in asset impairment losses, bad debts, and staff retrenchment costs.
Capital expenditure, however, dropped by seven percent.
The number of Telkom fixed lines dropped for the first time — by one percent. This was largely due to lines being discontinued over bad debt, and partly because of more and more customers opting for cellphones, Weldrick said. – Sapa