Telkom lowered its revenue and profit guidance for the medium term due to a slowdown in growth in its mobile business and a decline in its legacy unit, it said on Tuesday, as it reported an 2.5% rise in full-year earnings.

The shares plunged 9.5% the close at R36.40 apiece, after earlier falling as low as R36.14.

The telecommunications operator said headline earnings per share rose to 575.3c, boosted by lower finance charges and fair value movements. Group Ebitda slipped 0.5% to R11.9-billion, while group revenue fell 1.1% to R42.8-billion.

The majority state-owned operator now expects group revenue to grow at a mid-single-digit percentage over the next three years from mid- to high-single-digit growth.

Ebitda growth is also expected at mid-single digit from mid- to high-single digits.

“Telkom mobile has grown ahead of the market and secured a third market position. Going forward, we expect Telkom mobile to grow in line with its industry peers,” the operator said.

Mobile service revenue increased by 3.3% to R17.5-billion in the year ended 31 March, a significant slowdown from the previous year’s 34.5% growth when data demand surged due to people working and schooling from home.


Meanwhile, mobile data revenue grew by 2.9%, also a slowdown.

Telkom said the prepaid surge slowed “as the share of wallet spend plateaued”. It continued to grow its prepaid customer base with average revenue per user (Arpu) normalising to pre-Covid-19 levels, in line with management expectations, it added. It grew its post-paid base and maintained high levels of Arpu.

However, its legacy fixed-line business remained under pressure as users migrate from traditional fixed voice to newer technologies.  — Reuters