State-owned converged telecommunications firm, TelOne is on a financial come back as revenues increased to $117 million last year driven by growth in broadband income, while they narrowed their loss by 42% to $7 million in 2017, owing to cost containment and a growth in broadband revenue.
According to the company’s financial results for 2017, total revenues jumped by three percent from $14 million in 2016 despite a decline in voice revenue.
This was after broadband revenue had grown by 36 percent and reached $45 million in 2017 as compared to $33 million the previous year. The company’s subscriber base grew from 80 745 subscribers in 2016 to 87 851 subscribers in 2017 marking an increase of 8,8 percent.
In 2015, TelOne made headlines after they recorded a $5 million profit , which saw a major deep of $25 million loss for the year ending December 31, 2016, which they have narrowed down from $12million last year to $7million, signifying a come back to profitability.
TelOne chairperson Juliet Machoba said the company expects broadband revenue contribution to continue in an upward trend and reach up to 50 percent by 2019.
“In line with worldwide trends, voice traffic is expected to continue in a downward trend as clients continue to opt for broadband Internet and over the top services. Voice revenue in TelOne is expected to reduce to less than 40 percent in 2019 while broadband contribution to revenue is expected to reach up to 50 percent in the same period,” she said at the company’s Annual General Meeting on Friday, last week.
In line with worldwide trend of voice decline, TelOne’s voice traffic declined by six percent last year.
The telecommunication company, which was recently granted a broadcasting licence, has already started a drive towards enhancing its value added service offering as a way of harnessing the potential revenues brought about by increased broadband capacity and subscribers.
TelOne’s balance sheet continues to be weighed down by legacy loans and the company is expecting a conclusion of the debt restructuring to ease the company’s profit and loss position.
The unavailability of foreign currency remains a major constraint to the parastatal, with foreign obligations rising to unsustainable levels. TelOne operations, including bandwidth importation are dependent on foreign partners.
TelOne, which saw its profitability at earnings before interest, taxes, depreciation and amortisation level improving by 47 percent to $20 million in 2017 due to cost containment and broadband growth, continues to call for prioritisation of foreign currency allocations to settle obligations with business partners and avoid service disruption to clients.
In the period under review, the company’s registered a 42 percent reduction in operating losses from $12 million in 2016 to $7 million.
Last year, TelOne began in earnest to implement the $98 million National Broadband Project (NBB) which is now 98 percent complete.
This investment was largely focused on expanding the backbone footprint, increasing the core network capacity as well as fortifying the network which was largely legacy.
The parastatal believes that the recent announcement by government to privatise the company is expected to bring in new opportunities for growth and partnerships. — The Financial Gazette