By Lehlohonolo Lehana.
Telkom wants the next spectrum auction to be pushed back to 2025. The company disclosed the request this morning, when it announced its interim financial results for the six months ended 30 September.
The Independent Communications Authority of South Africa (ICASA) had earmarked 2024 to conclude the auction of the International Mobile Telecommunications (IMT) Radio Frequency Spectrum.
Icasa finally concluded a spectrum auction for 4G- and some 5G-suitable spectrum in 2022 from which Telkom rivals MTN and Vodacom emerged with the largest allocations.
Spectrum is the lifeblood of the mobile telecommunications industry – without sufficient access, operators’ networks can become congested, degrading performance for end users.
“Telkom has requested that Icasa postpone the second auction to the next financial year (2025), on the basis that studies still need to be completed by Icasa in preparation for the next auction,” Telkom said.
It said, too, that the “current challenging economic environment, including the impact of load shedding, will make it particularly difficult for Telkom and other market participants to [participate] in the auction”.
“Icasa has, to date, not responded to Telkom’s request.
Meanwhile Telkom highlighted the group’s solid earnings growth during the period. The group’s basic earnings per share increased 52.1%. Profit after tax from total operations increased by 52.3% to R976 million, from R641 million during the first half of 2023.
But one lowlight of Tuesday’s results was Telkom’s debt, which investors have previously raised red flags over. The group’s net debt increased by 8.2%, from R16.7 billion as of March 2023 to R18.1 billion in September 2023.
Telkom chief financial officer Dirk Reyneke noted that the group had managed to significantly improve its debt maturity profile by moving more than R4 billion from short- and medium-term debt to longer-term debt “at very sound commercial rates”.
Telkom’s share price received a boost this morning after news that the group was close to concluding an outright sale of Swiftnet, its masts and towers business. The sale will put Telkom one step closer towards positioning itself as an infrastructure business at its core.
The Swiftnet sale will release capital that can be used to strengthen Telkom’s balance sheet.