Telkom AR front.qxp

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Telkom Annual Report 2009
Operational review (continued)
Peter Nelson was appointed Chief
Financial Officer on December 8, 2008.
On July 7, 2009 Telkom announced the
appointment of Jeffrey Hedberg as Chief
Executive Officer of Multi-Links.
Segmental reporting and discontinued
operations
At the beginning of 2009, Multi-Links was
added as a separate financial reporting
segment. Our four reporting segments are
now fixed-line, Multi-Links, mobile and
other. The other segment includes Trudon,
formerly TDS Directory Operations; Africa
Online; Swiftnet and Telkom Media.
Discontinued operations include Vodacom,
Swiftnet and Telkom Media.
Acquisitions and investments
During the year under review we purchased
an additional 25% of Multi-Links in Nigeria,
giving us 100% control of the company. In
addition, after year end we acquired
MWEB Africa and 75% of MWEB
Namibia from Naspers and we sold our
75% shareholding in Telkom Media to
Shenzhen Media South Africa.
Strategic agreement with AT&T
On April 16, 2009 we entered into a
strategic memorandum of understanding
with global communications leader AT&T to
enable the Company to extend its reach
into sub-Saharan Africa to service corporate
customers and boost our strategy to grow a
strong local footprint in Africa.
Business summary
We are one of the largest companies
registered in South Africa and one of the
largest communications service providers in
Africa based on operating revenue and
assets. As of March 31, 2009, we had
total assets of R85.8 billion; operating
revenue from continuing operations of
R35.9 billion; approximately 4.5 million
telephone access lines with 99.9% of these
connected to digital exchanges.
We offer our customers fixed-line voice
services, fixed-line and wireless data
services and mobile communications
services. Other services include the Trudon
Group, our directory services, Multi-Links
and MWEB Africa subsidiaries.
Overview
Our fixed-line segment is our largest
business segment and includes our fixedline
voice, data and internet businesses.
Telkom’s fixed-line services comprise:
• Fixed-line subscription and connection
services to postpaid, prepaid and
private payphone customers using PSTN
lines including ISDN lines, and the sale
of subscription based value-added voice
services and customer premises
equipment (CPE) rental and sales.
• Fixed-line traffic services to postpaid,
prepaid and payphone customers
including local, long distance, fixed-tomobile,
international outgoing and
international Voice over Internet Protocol
(VoIP) traffic services.
• Interconnection services, including
terminating and transiting traffic from
South African mobile operators and
international operators, as well as
transiting traffic from mobile to
international destinations, and
• Data and internet services, including
domestic and international data
transmission services, such as point-topoint
leased lines, ADSL services,
W-CDMA packet based services,
managed data networking services, as
well as internet access and related
information technology services.
Products and services
Subscriptions and connections
Telkom provides post-paid, prepaid and
private payphone customers with digital
and analogue fixed-line access services
including PSTN lines, ISDN lines, and
wireless access between a customer’s
premises and our fixed-line network. Each
analogue PSTN line includes one access
channel, each basic rate ISDN line
includes two access channels and each
primary rate ISDN line includes 30 access
channels. Each ISDN line transmits signals
at speeds of 64 Kbps per channel.
Subscriptions to ADSL are included in our
data services revenue.
We were the first fixed-line operator
globally to provide a prepaid service on a
fixed-line network. Our prepaid service
offers customers an alternative to the
conventional post-paid fixed-line telephone
Year ended March 31,
2008/2007 2009/2008
(in thousands, except percentages) 2007 2008 2009 % change % change
Post-paid PSTN (1) 2,971 2,893 2,769 (2.6) (4.3)
Business 1,426 1,429 1,396 0.2 (2.3)
Residential 1,545 1,464 1,373 (5.2) (6.2)
Prepaid PSTN 795 743 766 (6.5) 3.1
ISDN channels 718 754 781 5.0 3.6
Payphones (2) 158 142 135 (10.1) (4.9)
Total fixed access lines (3) 4,642 4,532 4,451 (2.4) (1.8)
(1) Excluding ISDN channels. PSTN lines are provided using copper cable, DECT and fibre.
(2) Includes public and private payphones.
(3) Total fixed access lines are comprised of PSTN lines, including ISDN channels, prepaid lines, ADSL lines and public and private payphones, but excluding
internal lines in service. Each analogue PSTN line includes one access channel, each basic rate ISDN line includes two access channels and each primary
rate ISDN line includes 30 access channels.