Telkom mobile launch imminent

Johannesburg - Telecommunications group Telkom [JSE:TKG] said on Monday that it remains on track to launch its mobile service in 2010.

Speaking at a teleconference as part of the company's annual results announcement on Monday, Telkom Group CEO Reuben September confirmed that the launch remained on track for 2010, although the outgoing CEO did not specify a date.

"Telkom is at an inflection point with growth in traditional fixed line voice revenues declining, September said.

"The majority of global fixed line incumbents have discovered that a successful operation requires an integrated mobile business.

"We believe that there is a market opportunity in South Africa as mobile voice and especially mobile data are still experiencing growth."

It said that a product range spanning both mobile and fixed value pools would enable the group to defend itself more effectively against competitors and to grow revenues.

Telkom said it planned to use mobile technology to offer fixed line services in areas where it was experiencing operational challenges such as copper theft, breakages and slow copper roll-out to new greenfield areas.

Telkom recently signed a national roaming agreement with MTN Group [JSE:MTN] covering services such as Voice, 2G and 3G data, SMS, MMS and USSD on a national basis.

"In addition, Telkom will also offer a full international roaming service at launch through another established and experienced international service provider.

"To take these services to market, Telkom is required to negotiate mobile interconnect agreements with other mobile and fixed operators.

"These negotiations are at an advanced stage," it said.

Telkom said it had ordered 2 000 base stations, which are in the process of being constructed in the first year.

"We plan to have 40% of our own population coverage at launch which will be grown as required over five years. Full national coverage will be provided through the roaming agreement with MTN".

It pointed to a capital expenditure of R6bn over five years, as a requirement to implement mobility.

Earlier on Monday, Telkom posted a 92% decline in full-year profit, hit by higher operational costs at home and tough competition at its Nigerian unit.

Despite the big revenue decline, which had been widely expected, Telkom shares traded almost 4% higher on Monday morning at 3 835 cents per share.

 - I-Net Bridge