Data now TelOne’s cash cow as voice trails off

TelOne managing director, Chipo Mtasa

TELONE generated more revenue from data than its traditional voice service for the first time ever in the first quarter of 2018, following the company’s tilt towards becoming a fully fledged technology entity.

The latest report from the Post and Telecommunications Regulatory Authority of Zimbabwe (Potraz) shows that internet and data contributed 46.2% to TelOne’s first quarter revenues, edging voice’s 44.8% contribution.

Broadband revenue increased by 3.7%, offsetting a 16% decline in voice traffic and helping hold total quarterly revenue steady at $28 million.

Data contributed 42.5% to TelOne’s topline in the fourth quarter of 2017, when voice accounted for 47.4% of total revenues. The company expects broadband’s contribution to revenue to reach 50% by 2019 following investments in the network, funded mainly by a US$98 million Chinese loan.

TelOne sees voice contributing less than 40% to total revenue by 2019.

Voice traffic declined 16% from the fourth quarter and 34% from the corresponding period of 2017, with net on net fixed calls declining by about 45%.

With many businesses switching over to Voice over Internet Protocol (VoIP), there was, however, an increase in traffic from Internet Access Providers (IAPs) and TelOne.

Incoming calls from IAPs increased by 9%, while outgoing traffic to the IAPs increased by 8%.

TelOne, one of the few government-owned entities fully adhering to financial reporting standards, announced $117 million revenues for 2017, up 3% on the previous year, at its June 29 annual general meeting.

The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) were up 43% to $20 million, on the back of tight cost containment and broadband growth.

TelOne also managed to reduce operating losses by 42%,  from $12 million in 2016 to $7 million in 2017.

The first quarter of 2018 shows a continuation of 2017 trends, when TelOne’s broadband revenue grew by 36% to $45 million, while voice traffic decreased by 6% in the year, resulting in a 9% revenue decline.