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Telkom Annual Report 2009
Financial review (continued)
Fixed-line capital expenditure, which
includes spending on intangible assets,
decreased by 1.5% to R6,690 million and
represents 19.9% of fixed-line revenue.
Baseline capital expenditure of
R3,343 million in the 2009 financial year
was largely for the deployment of
technologies to support the growing data
services business (including ADSL footprint),
links to the mobile cellular operators and
expenditure for access line deployment in
selected high growth commercial and
residential areas. The continued focus on
rehabilitating the access network and
increasing the efficiencies and
redundancies in the transport network as
well as the initiation of the fixed-wireless
roll-out contributed to the network evolution
and sustainment capital expenditure of
R1,488 million.
Telkom continues to focus on its operations
support system investment with current
emphasis on workforce management,
provisioning and fulfilment, assurance and
customer care, hardware technology
upgrades on the billing platform and
performance and service management and
property optimisation. During the year
ended March 31, 2009, R603 million
was spent on the implementation of several
systems.
Fixed-line capital expenditure, which
includes spending on intangible assets,
increased 3.0% to R6,794 million in the
2008 financial year from R6,594 million
in the 2007 financial year and represented
20.9% of fixed-line revenue compared to
20.4% in the 2007 financial year. The
increase in baseline and revenue
generating capital expenditure to
R4,095 million in the 2008 financial year
from R3,568 million in the 2007 financial
year was largely for the deployment of
technologies to support the growing data
services business (including ADSL footprint),
links to the mobile cellular operators and
expenditure for access line deployment in
selected high growth residential areas.
During the year ended March 31, 2008,
R841 million was spent on the
implementation of systems compared to
R1,141 million in the 2007 financial year.
Mobile capital expenditure (50% of
Vodacom’s capital expenditure) increased
by 3.2% to R3,569 million in the 2009
financial year from R3,460 million in the
2008 financial year and represents 12.9%
of mobile revenue compared to 14.4% in
the 2008 financial year which was mainly
spent on the continued investment to
improve geographic coverage and
increase capacity for both the voice and
data networks in South Africa and to
expand coverage in Tanzania and
Mozambique.
Mobile capital expenditure, which includes
spending on intangible assets, increased
by 3.2% to R3,569 million and represents
12.9% of mobile revenue and was due to
the continued investment to improve
geographic coverage and increase
capacity for both the voice and data
networks. Mobile capital expenditure (50%
of Vodacom’s capital expenditure)
decreased by 4.1% to R3,460 million
in the 2008 financial year from
R3,608 million in the 2007 financial year
and represents 14.4% of mobile revenue
compared to 17.5% in the 2007 financial
year which was mainly spent on the
cellular network infrastructure consisting of
radio, switching and transmission network
infrastructure and computer software. The
decrease in capital expenditure in other
African countries was largely as a result of
decreased investment in Tanzania,
Democratic Republic of the Congo and
Mozambique offset by an increase in
investment in Lesotho.
Our consolidated capital expenditure in
property, plant and equipment for the
2010 financial year budgeted to be
approximately R7.9 billion, of which
approximately R7.0 billion is budgeted to
be spent in our fixed-line segment,
approximately R847 million is budgeted to
be spent in our Multi-Links segment, and
approximately R90 million is budgeted to
be spent in our other segment. Our capital
expenditures are continuously examined
and evaluated against the perceived
economic benefit and may be revised in
light of changing business conditions,
regulatory requirements, investment
opportunities and other business factors.