Broadband boosts Telecom Namibia profits
Telecom Namibia has posted its best year-on-year results for the country’s biggest telecommunications operator so far, as both revenue and profits rose.
This is according to the audited financial results for the financial year ended September 2012 released by the company this week, after its 2013 annual general meeting held in Windhoek on 26 March this year.
Revenues were up 7 percent year-on-year to N$1.22 billion. However, distribution costs increased to N$291 million, up by 18 percent, which was in line with expectations given the growth in services rendered.
An EBITDA profit (before interest, taxes, depreciation and amortisation) of N$127 million was realised, up by 23 percent compared to the previous year.
“Business was challenging in 2011/12 but we managed to increase turnover by 7 percent,” said Frans Ndoroma, Managing Director of Telecom Namibia. “We closed the year with good operating results which have positioned us well for the future,” Ndoroma added.
The growth is mainly thanks to the increased uptake of Telecom Namibia’s broadband offerings off the back of capital investment amounting to N$746 million since 2009 made in MPLS networks, fibre networks, both undersea and terrestrial, ADSL and WiMAX, among others.
There was a 500 percent increase in broadband subscribers from 2009 to 2012 and this was expected to grow further. “Our market share has remained strong thanks to the Speedlink product,” said Joseph Iita, Board Chairman of Telecom Namibia.
Speedlink is a fixed broadband product which offers unlimited Internet usage at a flat rate. The product has become a trendsetter in Internet service provisioning in the country.
Contrary to worldwide industry trends, the total number of fixed lines grew with 13 percent between 2009 and 2013, according to a report submitted at the company’s annual general meeting.
This report futher states that 74 fixed wireless (WiMAX) base stations are in operation, while 128 ADSL fixed broadband sites have been rolled out to date to provide always-on, high-speed Internet access and voice managed service to customers throughout the country.
The country was well-connected by Telecom Namibia network infrastructure with 395 points of presence and 228 digital destinations.
The report futher points out that the undersea cables have put Namibia at the forefront of regional connectivity. Regional and international points of presence in London, Frankfurt, Johannesburg and Cape Town were being installed to allow for cheaper and seamless connections for Namibia to the outside world.
“High-quality, high-speed global connectivity is required for the country to keep up with globalisation. Not only that. Customers want high-speed broadband and demand for the service will continue to grow multiplying the need for greater bandwidth capacity,” Ndoroma said.
To fully utilise WACS Telecom Namibia built a redundant national fibre network towards Zambia, Zimbabwe and Botswana based optical transport network (OTN) and dense wavelength division multiplexing (DWDM) technology. Phase C of the OTN/DWDM project was approved in August 2012 and will be commissioned this year.
OTN/DWDM is a cost-effective connectivity solution that would provide Telecom Namibia with the capability to meet the challenges that come with the continued growth of bandwidth hungry applications such as high-definition television, real-time data backup and peer-to-peer networking.
Another major initiative for 2013, says the report, is the upgrading of the national and international transport links (TNI/TEX) – as well as the relevant synchronous digital hierarchy (SDH) - to support full use of WACS product and service opportunities. The TNI/TEX platform will allow transport of both, IP and international express routes (TDM based) which will lead to increased use of capacity and a cut in production cost.
Over 8 000 kilometres of fibre optic routes have been rolled out so far and the fibre backbone infrastructure was being expanded to four times 10Gigabit DWDM to allow for high-speed, high-capacity connectivity.
Telecom Namibia has made capital investment of N$235 million during the 2011/12 financial year, with total assets increasing by 2.5 percent to N$2.6 billion.
Investment in human resources development amounted to N$11.2 million, which equates to 2.7 percent of labour cost, or a percent of the company’s turnover.
In the area of corporate social responsibility, BEE procurement orders placed totaled N$338 million for the year which equates to about 41 percent of overall spend.
The company also rolled out connectivity to schools through Xnet Development Alliance Trust, connected more farmers and rural communities with wireless systems, continued to run a rehab facility open to the public and sponsored various community causes as a way of giving back to society.
“Maintaining strong, positive growth in what is a difficult business landscape serves as validation that we are headed in the right direction and our strategies are aligned with customers’ needs.” Ndoroma said.
“We have identified the key opportunities for our business in the new financial year, and expect to maintain this positive growth in 2012/13 and beyond,” he concluded.