Telkom AR front.qxp

Service fees increased in the year ended
March 31, 2009 primarily due to
consultancy fees relating to the Vodacom
sale and unbundling transaction and higher
security costs to secure the copper network.
Service fees increased in the year ended
March 31, 2008 primarily as a result of
increased property payment costs, mainly
related to increased electricity usage,
electricity rates and taxes, payments to
consultants to explore local and
international investment opportunities,
higher security costs due to increases in
contract prices and maintenance and
monitoring of the cable alarm system and
legal fees related to Telcordia.
Operating leases. Operating leases
include payments in respect of equipment,
buildings and vehicles. Operating leases
decreased by 1.0% primarily due to a
6.0% reduction in the vehicle fleet from
8,792 vehicles at March 31, 2008 to
8,266 vehicles at March 31, 2009.
Operating leases decreased in the year
ended March 31, 2008 primarily due to a
discount received on the extension of our
vehicle lease and a reduction in the number
of vehicles from 9,694 at March 31, 2007
to 8,792 at March 31, 2008.
Depreciation, amortisation, impairments
and write-offs. Depreciation, amortisation,
impairments and write-offs increased in the
year ended March 31, 2009 primarily as
a result of higher amortisation of intangible
assets and increased depreciation due to
the ongoing investment in
telecommunications network equipment
and data processing equipment.
Depreciation, amortisation, impairments
and write-offs increased in the year ended
March 31, 2008 primarily as a result of
higher amortisation of intangible assets
and increased depreciation due to the
ongoing investment in telecommunications
network equipment and data processing
equipment, partially offset by lower asset
write-offs.
Mobile segment
Mobile encompasses all the operating
activities of our 50% joint venture
investment in Vodacom, the largest mobile
operator in South Africa with an
approximate 53% market share as of
March 31, 2009 based on total estimated
Telkom Annual Report 2009 121
The following table sets forth information relating to depreciation, amortisation, impairments and write-offs for the periods indicate.
Fixed-line depreciation, amortisation, impairments and write-offs
Year ended March 31,
2007 2008 2009 2008/2007 2009/2008
(in millions, except percentages) ZAR ZAR ZAR % change % change
Depreciation of property, plant and equipment 2,993 3,061 3,399 2.3 11.0
Amortisation of intangibles
Write-offs of property, plant and equipment and
305 409 638 34.1 56.0
intangible assets 284 262 321 (7.7) 22.5
Depreciation, amortisation, impairments and
write-offs 3,582 3,732 4,358 4.2 16.8
customers in South Africa. In addition to its
South African operations, Vodacom has
investments in mobile communications
network operators in Lesotho, Tanzania, the
Democratic Republic of the Congo and
Mozambique. On December 30, 2008
Vodacom acquired 100% shareholding in
Gateway Telecommunications Plc,
Gateway Communications (Proprietary)
Limited, Gateway Communications
Mozambique LDA, Gateway
Communications (Tanzania) Limited, GS
Telecom (Proprietary) Limited and their
respective subsidiaries, or Gateway which
has customers in 40 countries in Africa.
The following table shows information
related to our 50% share of Vodacom’s
operating revenue and operating profit
broken down by Vodacom’s South African
operations and operations in other African
countries and Gateway for the periods
indicated. All amounts in this table and the
discussion of our mobile segment that
follows represent 50% of Vodacom’s results
of operations unless otherwise stated and
are before the elimination of intercompany
transactions with us.
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