Telkom Mobile continues to haemorrhage money

An attempt by South Africa’s dominant landline operator to return to the mobile telecom market is looking increasingly like a short-term failure as the division is continuing to "bleed money".

In an interview with the Sunday Times, Telkom’s CEO, Sipho Maseko said that the company is reviewing the future of its mobile subsidiary, 8ta, recently rebranded as Telkom Mobile.

Maseko said that Telkom is looking at the "intensity" of the capital expenditure and operation needs of the mobile company.

The mobile network has around 4.1 million subscribers – but only 1.5 million of those were active revenue generating customers.

There had been recent talks between the third mobile network, Cell C and Telkom about a possible merger of the mobile divisions, although some commentators noted that would turn two smallish loss-making networks into one middle-sized loss-making network.

The smaller two networks also struggle to compete in voice call market due to the mobile termination rates that favour the two larger networks. It had been noted that 8ta could turn into a mobile data operator instead, using its significant radio spectrum assets.