TelOne saw its revenue declining by 16,9% in the five months to May at 49,4 million from the comparable period last year attributed to a decline in voice revenue on the back of the harsh economic environment.
BY NDAMU SANDU
In the same period last year, revenue was $59,5 million.
Briefing shareholders at the company’s annual general meeting on Friday, managing director Chipo Mtasa said the decline in revenue came despite a 10% increase in broadband revenue which failed to arrest the decline in voice revenue.
“The main reason for the decline in our revenue is that we do see a decline in voice revenue performance. Our decline in voice revenue performance is being prompted by subdued economic activity and the liquidity crunch. We have also seen voice tariffs, which have not been met by an increase in the volume of telephone minutes in terms of voice calling,” she said.
“However, we have seen that our broadband revenue is on the increase, we do have a 10% increase in broadband revenue. However, the 10% has not really matched the decline in our voice revenues which are around 18-19%.”
In the period under review, fixed broadband subscribers rose to 76 303 from 60 070 in the comparable period last year.
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“We are still driving the broadband segment of our business so that at least it can arrest the decline in revenue. So this is the issue that we are contended with, we also have the issue of OTTs [over the top] and intense competitive factors around,” Mtasa said.
OTTs include social media applications such as WhatsApp.
“However, we are not saying OTTs alone are the ones affecting our business because even through the OTTs we see the drive now on the broadband business as they have to operate from broadband. It continues to enhance the need for us to enhance the broadband business.” Mtasa said.
Earnings before interest was flat at $1,3 million which Mtasa said showed that there efforts done to contain costs. Operating costs declined to $48,1 million in the five months of the year from $58,1 million in the comparable period in 2015. Operating costs to revenue was 97% down from 98% recorded in the same period last year.
Mtasa said TelOne was undertaking a number of cost containment measures, which include buying directly from suppliers instead of dealing with middlemen, negotiating with external contractors and suppliers to reduce costs, moving out of rented facilities into own buildings and a 15% salary cut across the board which was introduced in August last year.
Mtasa said TelOne’s creditors stood at $129 million. She said the company’s debtor’s book stood at $264 million and the parastatals. Of that about $150 million can be collected, she said.
