| Wed 28 Jul 2004, 8:45 | | Vodacom Trading Update For The Quarter Ended June |
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Telkom SA Limited - Vodacom Trading Update For The Quarter Ended June 30, 2004
Telkom SA Limited
(Registration Number 1991/005476/06)
ISIN Code: ZAE000044897
JSE and NYSE Share Code: TKG
(`Telkom`)
VODACOM TRADING UPDATE FOR THE QUARTER ENDED JUNE 30, 2004
Vodacom Group (Proprietary) Limited (`Vodacom` or `Vodacom Group`) (unlisted),
South Africa`s leading mobile communications group, in which Telkom has a 50.0%
holding, announced a quarterly update for the three months ended June, 30, 2004.
As of June 30, 2004, Vodacom Group recorded 12.4 million customers on its
networks operated in South Africa and other African countries, a 10.8% increase
in the three months since March 31, 2004. The Group`s international operations
comprised 1.8 million, or 14.8% of the total customer base.
Vodacom South Africa increased its customer base by 8.8% since March 31, 2004 to
10.6 million customers. Vodacom South Africa`s customer base consisted of 1.5
million contract customers and 9.0 million prepaid customers, increases of 6.8%
and 9.2% since March 31, 2004 respectively. South African ARPU decreased from
R177 per month for the year to March 31, 2004 to R164 per month for the year-to-
date June 30, 2004 primarily because of the higher proportion of prepaid
customers in the total base, seasonal fluctuations in customer spending patterns
and the higher proportion of inactive customers and lower churn which resulted
from the change in Vodacom`s disconnection policy.
Customers, ARPU, 3-month inactive statistics and churn as at and for the year-to
date June 30, 2004 compared with March 31, 2004 for Vodacom South Africa are as
follows:
Vodacom South Africa March 31, 2004 June 30, 2004 % change
Customers (thousands) 9,725 10,580 8.8
Contract 1,420 1,517 6.8
Prepaid 8,282 9,040 9.2
Community services telephones 23 23 -
ARPU (ZAR) 177 164 (7.3)
Contract 634 633 (0.2)
Prepaid 90 79 (12.2)
Community services telephones 2,155 2,387 10.8
3-month inactive customers as % of 17.6 21.2 3.6 pts
total customers
Contract 5.7 5.7 -
Prepaid 19.7 23.8 4.1 pts
Churn (%) 36.6 13.6 (23.0 pts)
Contract 10.1 8.3 (1.8 pts)
Prepaid 41.3 14.5 (26.8 pts)
Vodacom`s other African operations increased its total customer base by 23.7%
since March 31, 2004 to 1.8 million customers. Vodacom Mozambique, which only
started commercial operations in December 2003, had 111,000 customers by June
30, 2004. ARPU declined substantially in all of Vodacom`s other African
operations mainly because of highly competitive trading conditions, seasonal
spending patterns of customers and Rand strength. The Rand strengthened by 8.4%
against the US Dollar from an average of R7.17 for the year ended March 31, 2004
compared to a year-to-date average of R6.57 for the quarter to June 30, 2004.
Vodacom`s other African operations` customers, year-to-date ARPU and churn as of
June 30, 2004 compared to March 31, 2004 are as follows:
March 31, 2004 June 30, % change
Other African operations 2004
Vodacom Tanzania
Customers (thousands) 684 837 22.4
Contract 5 5 -
Prepaid 676 829 22.6
Public phones 3 3 -
ARPU (ZAR) 128 91 (28.9)
Churn (%) 30.0 24.7 (5.3 pts)
Vodacom Congo
Customers (thousands) 670 783 16.9
Contract 8 9 12.5
Prepaid 653 768 17.6
Public phones 9 6 (33.3)
ARPU (ZAR) 150 115 (23.3)
Churn (%) 20.2 9.7 (10.5 pts
Vodacom Lesotho
Customers (thousands) 80 114 42.5
Contract 3 4 33.3
Prepaid 76 109 43.4
Public phones 1 1 -
ARPU (ZAR) 125 96 (23.2)
Churn (%) 65.1 0.1 (65.0 pts
Vodacom Mozambique
Customers (thousands) 58 111 91.4
Contract 1 2 100.0
Prepaid 57 109 91.2%
Public phones - - -
ARPU (ZAR) 110 72 (34.5)
Churn (%) 0.3 0.1 (0.2 pts)
Other African customers (thousands) 1,492 1,845 23.7
Johannesburg
28 July 2004
Special note regarding forward-looking statements
All statements contained herein, as well as oral statements that may be made by
us or by officers, directors or employees acting on behalf of the Telkom Group,
that are not statements of historical fact constitute `forward-looking
statements` within the meaning of the US Private Securities Litigation Reform
Act of 1995, specifically Section 21E of the U.S. Securities Exchange Act of
1934, as amended. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that could cause our actual results to be
materially different from historical results or from any future results
expressed or implied by such forward-looking statements. Among the factors that
could cause our actual results or outcomes to differ materially from our
expectations are those risks identified under the caption `Risk Factors`
contained in item 3 of Telkom`s most recent annual report on Form 20-F filed
with the U.S. Securities Exchange Commission (SEC) and our other filings with
the SEC, available on Telkom`s website at www.telkom.co.za/ir, including, but
not limited to, increased competition in the South African fixed-line and mobile
communications markets; developments in the regulatory environment; Telkom`s
ability to reduce expenditure, customer non-payments, theft and bad debt, the
outcome of arbitration or litigation proceedings with Telcordia Technologies
Incorporated and others; general economic, political, social and legal
conditions in South Africa and in other countries where Vodacom invests;
fluctuations in the value of the Rand and inflation rates, our ability to retain
key personnel; and other matters not yet known to us or not currently considered
material by us. You should not place undue reliance on these forward-looking
statements. All written and oral forward-looking statements, attributable to us,
or persons acting on our behalf, are qualified in their entirety by these
cautionary statements. Moreover, unless we are required by law to update these
statements, we will not necessarily update any of these statements after the
date hereof either to conform them to actual results or to changes in our
expectations.
Date: 28/07/2004 08:30:04 AM Produced by the JSE SENS Department
