Telecoms group <a href="http://www.telkom.co.za/" target="_blank" rel="noreferrer noopener">Telkom</a> has announced a 1.8% fall in its half-year profit, dated September 30. South Africa’s third-biggest telecom company’s headline earnings per share fell to 191.5 cents from 195 cents year-on-year.&nbsp; 
The group said that alongside its headline loss, its broadband service income fell short of its current flow of revenue which includes legacy data and fixed voice. However, revenues from fiber data service and IT services experienced a 15.5% and 1.9% growth respectively.&nbsp;&nbsp; 
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 <img loading="lazy" decoding="async" width="1249" height="720" src="https://technext24.com/wp-content/uploads/2024/03/telkom-2.jpeg" alt="South African Telkom sells its towers for $356m" class="wp-image-229185">
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According to the telecoms company, its broadband services have strengthened its coverage as the best mobile network provider in the country. 
“Our next-generation broadband offerings, enabled by ongoing capital investment in our networks, have positioned Telkom as the best-value mobile network in South Africa,” the group said. 
Telkom also maintained a market-leading home connection rate of 50% for the half-year financial period. 
Majority-owned by the South African government, the telco has been embarking on a system migration for the past few months. In order to provide improved internet service, the telecoms company has been migrating customers from copper-based technology to more effective and “next-generation network” (NGN) offerings such as fibre and LTE. 
While making comments about the group’s results, Telkom CEO Serame Taukobong expressed that the group demonstrated a robust and steady operational performance. 
“Underlying operational performance improved, driven jointly by revenue growth and internal cost optimization initiatives. We made substantial progress during the period as we advanced data-led revenues and harnessed gains from cost optimization initiatives, with a resultant adjusted Group EBITDA growing ahead of group revenue,” he said. 
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 <img loading="lazy" decoding="async" width="1500" height="800" src="https://technext24.com/wp-content/uploads/2024/03/Telkom-Group-CEO-Serame-Taukobong.jpeg" alt="South African Telkom sells its towers for $356m" class="wp-image-229186">
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 Telkom Group CEO Serame Taukobong
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“Earnings were impacted by a R451 million after-tax adjustment emanating from converting the Telkom Retirement Fund to a defined contribution plan, following the Financial Sector Conduct Authority’s rule amendment approval during the period. Restructuring costs of R160 million were also provided for during the period,” Taukobong added. 
<h4 id="telkoms-bcx-restructuring" class="wp-block-heading">Telkom’s BCX restructuring</h4> 
The company also announced that 400 employees have been affected by the restructuring of its ICT business, BCX. The restructuring was part of its sustainable business plan, Telkom announced the second phase of the S189 initiation which has cost the company&nbsp; R157 million. 
“The accelerated pace of change in the technological environment has significantly reshaped the role of IT. This necessitated fundamental changes to BCX’s operations to enable the business to reduce its cost base while revitalizing itself. We aim to conclude the majority of the process in the second half of the financial year,” said the group. 
In 1999, Telkom started reducing its workforce from 61,237. According to the latest development, Telkom’s total number of employees has dropped to 9,894. Considering BCX’s restructuring, the total number of employees has been forecasted to drop to 9,500. 
Meanwhile, Telkom BCX’s IT services revenue increased by 1.9% to R2.3 billion during HI. 
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 <img loading="lazy" decoding="async" width="800" height="400" src="https://technext24.com/wp-content/uploads/2023/03/IHS-Holding-Ltd-is-looking-to-acquire-South-Africas-Telkom-SOCs-tower.png" alt="IHS Holding Ltd is looking to acquire South Africa's Telkom SOC's tower" class="wp-image-182530">
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The group highlighted that amidst the increasing South African unemployment rate, indicators such as the bearable interest rate serve as a boost. 
“While we face challenges such as high unemployment rates and the need for economic growth to support our connectivity businesses, we are encouraged by positive signs in South Africa, including lowering interest rates and moderating inflation,” said the group. 
In response to its plans for H2, the telecoms company said that it will remain focused and build on current momentum.&nbsp; 
“Looking ahead, the strength of our balance sheet remains a top priority, ensuring that we stand resilient in the face of challenges. We will endeavour to maintain the good momentum we have experienced so far in the second half of the year, which is pointing towards a sustained trend of positive free cash flow. 
“It is important to emphasize that our focus on efficiency drivers is not solely about reducing workforce numbers but rather about optimizing performance across the board. We are actively reshaping the business construct without compromising our core strengths,” the group added. 
Telkom Group is one of the largest ICT services providers in South Africa. The company operates in more than 38 countries across Africa. The company is an Internet Service Provider (ISP) staple for SA and is 39% state-owned. Telkom offers several internet service packages and options, from LTE to Fibre. 
Also Read: <a href="https://technext24.com/2024/03/22/south-african-telkom-sells-towers-356m/" target="_blank" rel="noreferrer noopener">South African Telkom to sell its Swiftnet towers for $356m</a>.

South Africa’s Telkom half year profit shrinks by 1.8%, restructures BCX

Technext.ng

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