Telkom's performance due to increased spending
20 February 2008
News
Information from Frost & Sullivan
With pressure mounting on Telkom to ensure that it meets the telecommunications requirements for the 2010 World Cup, it has significantly increased its spending in the last six months. Its interim results released recently showed a 71,3% increase in cash flow utilised in investment activities.
While the current results show a 15,1% decrease in headline earnings per share, growth consulting company Frost & Sullivan believes that Telkom will start to deliver stronger performances as these investments pay off. The key issue is now for Telkom to make profitable acquisitions and investments both locally and across Africa.
"Increased spending can be expected from Telkom as it continues to seek new growth areas in Africa and improve its services," says Frost & Sullivan analyst Spiwe Chireka. "Telkom is in a high spending phase, with the fruits of this spending to be realised at a later stage."
Telkom will however face the dual challenges of stronger competition and lower prices in the telecommunications sector. This will be felt acutely now that Neotel has formally launched its products into the South African market. Telkom's drive to provide converged offerings that incorporate fixed-line, mobile, data and multimedia will however offer a means to meet these challenges.
"The growth of the mobile sector is a reality that Telkom needs to address," Chireka says. "While mobile penetration has increased from 72,2% in 2006 to 86,6% now, Telkom has reported a 1,2% decrease in the number of fixed lines."
Expansion into Africa through the acquisition of Africa Online offers promising opportunities, as does the Multilinks business. Increasing subscriber numbers through these two businesses will be essential to growing Telkom's revenue in the short term.
For more information contact Patrick Cairns, Frost & Sullivan, +27 (0)21 680 3274, [email protected]
Further reading:
RE+ South Africa 2026: From strategy to execution
News
Taking place at Gallagher Convention Centre in Johannesburg from 02 to 04 June 2026, this new addition to South Africa’s energy landscape introduces a focused commercial and industrial energy event within a proven exhibition platform.
Read more...
Africa Energy Indaba announces 2027 dates
News
Following the continued success and growing global impact of the Africa Energy Indaba, organisers have announced the dates for the 19th edition of the Africa Energy Indaba 2027.
Read more...
RS South Africa named master distributor for the Arduino UNO Q
RS South Africa
News
RS South Africa announced that it has been named Master Distributor for the Arduino UNO Q SBC platform across South Africa and the broader African region.
Read more...
Engineering in a world that cannot assume connectivity
Technews Publishing
Editor's Choice News
Across industrial automation, networking, and defence systems, engineers are rediscovering the importance of resilience and autonomy in an increasingly connected world.
Read more...
IOT secures major industry partnership
IOT Electronics
News
IOT Electronics has announced a new strategic partnership with Powell Electronics, becoming an Official Authorised Reseller in South Africa.
Read more...
Successful Proteus training conference
Dizzy Enterprises
News
Dizzy Enterprises recently hosted two hands-on Proteus Training Conferences, bringing together electronics professionals, designers, and enthusiasts to explore the latest capabilities of the Proteus Design Suite from Labcenter Electronics.
Read more...
Hitachi reinvents asset management solution
News
Hitachi Energy, in collaboration with Microsoft, is accelerating the digital transformation of essential infrastructure - from electricity networks and transportation corridors to heavy industrial operations - by reinventing how critical assets are managed and maintained.
Read more...
Mycronic releases mixed Q4 results
News
Mycronic reported mixed Q4 results for the year ended January to December 2025, while delivering record full year order intake and net sales.
Read more...
AGOA: Businesses should diversify or face significant exposure
News
Cross-border payments platform Verto has called on South African and African businesses to accelerate their transition toward a “post-AGOA” trade strategy following President Donald Trump’s signing of a one-year extension to the African Growth and Opportunity Act (AGOA).
Read more...
European components distribution growing
News
European electronic components distribution returned to growth in the fourth quarter of 2025, according to newly released figures from DMASS Europe.
Read more...
printer friendly version