TelOne in 6,3pc revenue jump

Eng Shamu

Eng Shamu

Business Reporter
DIVERSIFIED communications firm, TelOne, recorded a 6,3 percent jump in revenue in the third quarter of 2017 largely driven by voice and Internet services, the postal and telecommunications sector performance 3rd Quarter Report shows.

The report, which is compiled by the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) on a quarterly basis, indicates that voice contributed 50,8 percent to revenue followed by internet and data (36,5 percent). Other revenue heads brought in a combined 12,7 percent, with fixed monthly submissions leading with 10,8 percent; infrastructure leasing (1,7 percent) and connection charges (0,2 percent).

“TelOne registered a 6,3 percent increase in revenue in the third quarter of 2017,” reads the report.

In the previous quarter, TelOne’s revenues were $28,5 million, having come down 2,2 percent from $29,2 million in the first quarter. Revenues are declining owing to a fall in the contribution of voice to TelOne’s revenue generation, as many people have turned to Over-The-Top services (OTTs) such as WhatsApp, Facebook, Twitter and Viber, to communicate.

The Potraz report says TelOne continues to face competition from mobile phone operators – Econet Wireless Zimbabwe, NetOne and Telecel, which have a combined 13,8 million active mobile subscribers.

Total voice traffic processed by TelOne was 132,1 million minutes, representing a 1,7 percent decline from 134,4 million minutes recorded in the previous quarter. In the quarter under review, active fixed telephone lines declined by 2,3 percent to reach 260 183 from 267 034 recorded in the second quarter of this year.

Despite the decline in active fixed telephone lines, fixed teledensity remained at 1,9 percent, where it was in the second quarter. It is now expected that voice revenues might marginally increase going forward as TelOne presses ahead with its roll-out of fixed internet such as ADSL to rural institutions such as health and educational centres.

However, TelOne’s capital expenditure increased by 67,6 percent in the 3rd quarter, as it continues with investments in the broadband sector, as it remodels its business to rely on data for more revenues.

The move has been necessitated by the unrelenting slide in telecommunications voice revenues across the world due to the rise in OTTs. TelOne, which recently launched its Data Centre project, recorded a sharp voice revenue decline of 43 percent between 2013 and 2016.

Indications are that the revenue head will remain under pressure as the bulk of the population particularly youths, has adopted new media platforms given their attendant low costs.

Broadband is expected to steer the company to profitability in the next two years. TelOne is targeting to increase broadband contribution to 48 percent of total revenue by 2020, up from the current average of 20 percent.

Voice revenue would be deliberately collapsed to 43 percent from the current 51 percent and other additional revenue streams such as the Data Centre and cloud services for enterprise business, are expected to contribute 8 percent.

TelOne board chairman Engineer Charles Shamu, recently told The Herald Business that they are confident the technology transformation roadmap buttressed with new product and service offerings, supported by reliable Internet Protocol (IP) and strong human capital and customer centric skills, will bring the company back on track.

It is expected that the convergence of services and miniaturisation of systems will create a lot space in TelOne’s exchanges. The company has three Data Centres in Mazowe, Harare and Bulawayo.

The Data Centres at Harare Main Exchange and Mazowe Earth Station, come with redundant power and air-conditioning, fire detection and suppression, biometric and card access controls, 30 equipment racks and a host of cloud services capabilities.

TelOne has broadband capacity of 105 000 ADSL and fibre to the Home combined, and the figure is expected to grow by 100 percent and reach 250 000 next year.

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