The results led to price volatility yesterday, and at one stage the stock traded R5,60 lower. At close of trade, it was 1,6% down at R171,60.
Acting CEO Reuben September painted analysts a bullish picture despite Telkom having no CEO and haemorrhaging many key managers to industry rivals.
The group's growth strategy mirrors that of Vodacom, with both operators aiming to widen their ranges of services as the profit from traditional voice calls dives.
High-speed internet access was a crucial part of its growth plan, and September said Telkom was committed to lowering the cost of its broadband services to attract people who had not used the internet.
Telkom is also putting a massive emphasis on geographic expansion. That has begun with its investment in Nigeria, where it bought the operator, MultiLinks, and through the R150m acquisition of Africa Online, an internet service provider active in eight countries.
September said that Telkom was at the crossroads, and those "small but exciting" moves "sets us on the path".
"We have a growth thrust in three areas: we have to grow in mobile, in data and geographically."
Locally, it had been a natural step to set up its Telkom Media division to offer television broadcasts to its customers via satellite and later over their internet lines, said September.
Frost & Sullivan analyst Spiwe Chireka said Telkom's acquisition of Africa Online was the first of many expected moves into the rest of Africa, as it had to grow its data services and its presence in Africa to withstand competition.
"We're seeing increased competition from internet service providers, mobile operators and the data services market, resulting in lower tariffs to consumers. These factors are likely to impact Telkom's revenue levels."
The fact that the new national operator Neotel had won a R100m contract to supply services to the government in preference to Telkom also indicated the start of real competition, Chireka said.
Source: Business Day
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