Strife, rivals, HIV may hit Telkom

JOHANNESBURG – Tougher competition at home, strife in Africa, a new boss and soaring HIV-AIDS rates could weigh on profits at South African fixed-line phone company Telkom, the company said.

Telkom also said in a regulatory filing to the US Securities and Exchange Commission made public late on Monday that tougher pricing rules, which will force the company to cap price increases at below inflation, may also hurt income. Africa’s biggest fixed-line phone company has so far had a virtual monopoly in its home market so regulators have imposed a strict price cap at 3,5 percentage points below inflation to stop it over-charging customers.The company now faces tougher competition, not only from highly successful mobile operators, but from the imminent introduction of a second national fixed-line operator, and from value-added network service (VANS) providers, which are allowed to provide cheaper calls over the Internet under new rules.”Increased competition in the South African telecoms market may result in a reduction in overall average tariffs and market share in our fixed-line business, which could cause our growth rates, operating revenue and net profit to decline,” Telkom said in the filing’s mandatory ‘Risk factors’ section.State-controlled Telkom last month unveiled a 47,5 per cent jump in annual headline earnings per share, which strip out capital, non-trading and one-off items, but said core margins would stagnate this year as it faced stiffer competition.-Nampa-ReutersAfrica’s biggest fixed-line phone company has so far had a virtual monopoly in its home market so regulators have imposed a strict price cap at 3,5 percentage points below inflation to stop it over-charging customers.The company now faces tougher competition, not only from highly successful mobile operators, but from the imminent introduction of a second national fixed-line operator, and from value-added network service (VANS) providers, which are allowed to provide cheaper calls over the Internet under new rules.”Increased competition in the South African telecoms market may result in a reduction in overall average tariffs and market share in our fixed-line business, which could cause our growth rates, operating revenue and net profit to decline,” Telkom said in the filing’s mandatory ‘Risk factors’ section.State-controlled Telkom last month unveiled a 47,5 per cent jump in annual headline earnings per share, which strip out capital, non-trading and one-off items, but said core margins would stagnate this year as it faced stiffer competition.-Nampa-Reuters