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Telkom Mobile doubles users

Telkom has increased revenues and dividends as its Mobile division finally gains serious traction, while ADSL’s collapse continues

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South Africa’s monopoly fixed-line operator, Telkom, startled the market this week with news that its mobile division had almost doubled its subscriber base, by 85.9%, to 9.7-million. With the fixed line subscriber base declining every year for the past 18 years, Telkom had pinned its hopes on significant uptake of the mobile service in a highly competitive environment. 

For the year ended 31 March 2019, overall growth for the organisation was muted, with a 5.3% increase in group operating revenue to R41.8-billion. Mobile services revenue, however, increase by 58.3%, underpinned by the group’s broadband-led proposition, according to a statement from Telkom. 

“This is on the back of increased competition and the fact that technology changes continue to place the fixed business under pressure,” it said. “The results offer proof that the group’s strategy of investing in new technologies continues to bear fruit.”

EBITDA increased by 8.5% to R11.3 billion, which can be attributed to our ongoing sustainable cost management. The group EBITDA growth is faster than the revenue growth of 5.3%. The EBITDA margin expanded by 0.8% to 27.1%.

“In line with global trends, our fixed business remains under pressure,” said Sipho Maseko, Telkom Group CEO. “With that in mind, investing in technologies to drive future revenue streams necessitates the evolution of the group’s skill base and acquiring various capabilities. Our human capital investment focuses on creating efficiency and effectiveness in the context of growing the business, achieving operational excellence, retaining key skills and ensuring our future competitiveness.”

Despite adding 4.5 million subscribers, Telkom’s blended average revenue per user was stable at R100. Mobile revenue contribution increasing from 3.2% to 25.7%, while information technology revenue grew from 0.9% to 16.2%. 

Telkom said it continues to invest in the fibre ecosystem, which is sustaining fixed data revenue.

Regarding other business segments, it said in its statement: “Gyro’s revenue increased by 24.%, underpinned by the group’s strategy to separate the property portfolio to improve management focus and unlock value for the group. Further to this, the dedication and focus on the mast and tower as well as the property portfolio has enabled the business to service clients more effectively and will enhance competitiveness as the largest independent tower company in South Africa. Telkom will continue to explore and deploy the latest technology to reduce development cost and maximise development yield while offering competitive rental levels to clients.” 

Performance of its BCX subsidiary remains “dampened”. It said BCX’s revenue “significantly improved from a R1 billion revenue decline in the prior year to a revenue decline of R683 million”. This is attributed to several initiatives to stabilise the business, including a change in operating model and the enhanced strategy to focus on customer retention.

It said the pricing transformation journey that Openserve embarked on two years ago was starting to show positive signs and revenue was resilient despite customers migrating to next-generation technologies at lower price points. Translated, this indicates that the decline of ADSL has slowed down due to improved pricing, despite ongoing migration to fibre.

The numbers, however, tell a different story. Telkom reported that its ADSL, VDSL, and fibre subscribers combined declined by 13.6%, from 981,176 in March 2018 to 847,650 in March 2019. Assuming that fibre installations have been increasing, this suggests a continued collapse of the ADSL subscriber base.

“Despite price reductions over the past two years, ongoing voice revenue pressure and a change in the revenue mix, Openserve contained the revenue decline at 3.3% and EBITDA grew by 3.4 points to 37.1%,” Telkom said. “This was enabled by, among others, our strategy to modernise the network to improve cost to connect and cost to serve.”

During the period, Telkom made a capital investment of R7.7 billion, with a capital expenditure to revenue ratio of 18.4%. 

“The ongoing investment enabled Telkom to grow new revenue in evolving technology, offsetting the traditional revenue shrinkage. Telkom will continue to proactively invest in technologies and the network so that the group remains at the forefront of change.”

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Project prepares Africa’s youth for the future

A partnership between the African Union and VMware is hoped to give new impetus to preparing Africa’s youth for the future, writes ARTHUR GOLDSTUCK

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VMware’s Everline Wangu Kamau-Migwi and African Union Commissioner Sara Anyang Agbo at VMworld in Barcelona. Pic by Arthur Goldstuck

The woman in the regal red dress and gold turban cuts a dramatic figure as she sweeps through the halls of the Fira Gan Via expo centre in Barcelona, Spain. She stands out in sharp contrast to thousands of hipsters in hoodies and businessmen in dark suits thronging the halls. But she is on a mission that will bring true relevance to the work of many of these conference delegates

She is Sara Anyang Agbor, Commissioner for HR, Science & Technology at the African Union Commission. Agbor is at the VMworld cloud conference to sign a memorandum of understanding with the event hosts, VMware. They are formalising a shared commitment to developing the next generation of digital leaders in Africa in a project called Virtualise Africa.

When Agbor began her career as as a lecturer in the Department of English at the University of Yaounde in Cameroon in the early 2000s, the last thing she worried about was technological infrastructure. But fast forward a decade and a half, and she talks of little else.

Agbor is passionate about preparing Africa’s youth for the future. Her focus is still on education, but she discusses it in terms far removed from her PhD in English literature.

“Nelson Mandela said it very well, that education is the greatest weapon that can transform the world, but what kind of education are we talking about?” she poses the question after signing the memorandum. 

“We’re talking about the education that can lead to the future of work. It is no longer about us having degrees in history and degrees in English, etcetera. It is no longer important for kids to go to school, just for the sake of going to school and having certificates. It is very important for them to go to school that will give them jobs so that they can become job creators, rather than job seekers.”

To that end, VMware will work with the African Union to bring to the continent the VMware IT Academy, a network of educational institutions that provides students with access to learning certification opportunities and hands-on lab experiences with VMware technologies.

Delegates to VMworld in Barcelona pick up new skills. Pic by Arthur Goldstuck

VMware is the world’s leading developer of software for managing data centres and businesses’ adoption of cloud computing, generally referred to as virtualisation. It is a strategic partner of cloud giants like Amazon Web Services, Microsoft and Oracle, which are all setting up data centres in South Africa, and creating thousands of jobs across the continent. As such, VMware technology skills and certification represent a direct path into careers that are tailor-made for the digital revolution sweeping the world.

Everline Wangu Kamau-Migwi, channel lead for VMware in East Africa, responsible for setting up the VMware IT Academy in the region, says that the agreement is an outcome of the company’s quest to use “technology as a force for good”.

“We asked how we as VMware can play a role in bridging the digital skills in in the African continent,” she says. “Hence Virtualise Africa was born, with a key mandate around education. We’ve partnered with learning institutions, starting with universities, a little over 30 in Africa, where we are now giving them material, learning resources, and labs, and they’re able to access this using a methodology called ‘train the trainer’. 

“It focuses on the faculty, on the staff, for sustainability of the program within the learning institutions. Appreciating the fact that VMware virtualisation is the core of cloud computing, this is a technology that is well-appreciated across Africa. But we find that we are not moving at the pace we need to, especially in the adoption of emerging technologies, because we don’t have those skills.

“VMware also has a huge ecosystem with both a partner and customer ecosystem. So we looked at how we can leverage this ecosystem and ensure that those students who are graduating are able to innovate, are employable, and can be enterprising while doing that.”

Globally, around 550 institutions are part of the programme, with the University of South Africa the first in this country coming on board. VMware also supplies licenses to several thousand institutions around the world to teach the curriculum with its products and solutions. 

Enter the African Union. It has 55 member states, and the bulk of their populations are youths.

“We call it a demographic asset,” says Agbor. “But this demographic asset can also be a demographic liability or a demographic time bomb, if we did not put in place the right resources to capture the mind of the African youth. Over 200 million African youth are unemployed. Many have certificates, but they do not have a job.

“As a result, there is no dream, there is no hope. So now they migrate, looking for the European dream, the Canadian dream or the American dream. But there is an African dream.” 

Read more about the AU’s agenda for 2063.

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Beware biometrics, and other digital dangers

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Traditional passwords nowadays are a weak point as data leaks happen quite often. More and more companies decide to change the approach and adopt biometrics. However, no one is immune to identity theft and there already have been several actual cases of losing biometric data.

To raise awareness on the topic and show that such data requires strong security regulations, cybersecurity company Kaspersky has distinguished several dangers of unsecured biometric data:

  1. Stranger-danger. In order to set face or touch recognition, the system usually requires one sample of a finger or a face. Hence, it is possible for a user to fail authorisation due to lighting conditions or such changes in their appearance as glasses, beards, make-up or aging. On the contrary, it allows cybercriminals to steal this sample and use it according to their malicious aims.
  2. A password for a lifetime. It is not a problem to change a password consisting of numbers and letters, but once you lose your biometric data you lose it forever. The problem with touch recognition can partially be solved by leaving only 2-4 fingerprints, leaving others for emergency cases, but it is still not safe enough.
  3. A digital locker. Existing «digital lockers» rely on cloud-based help – biometric matching usually happens on the server side. If successful, the server provides the decryption key to the client. That increases a risk of a massive data leak – a server hack might lead to the compromising of biometric data.
  4. Biometrics in real life. There are two cases when an ordinary person can encounter biometric authentication. Firstly, banks try to adopt palm scans on ATMs as well as voice authentication on phone-based service desks. Secondly, individual electronic devices use touch and face recognition. However, biometric security is not yet fully developed and there are such constraints as CPU power, sensor price and physical dimensions, so some users have to sacrifice system robustness – some devices can be fooled by a wet paper with fingerprints generated using an ordinary printer or gelatin cast.

To secure biometric data, Kaspersky has recommended:

  • employing stringent security measures against breaches of traditional logins;
  • for businesses it is needed to improve ATM design so as to prevent the installation of skimmers or establishing control over the security of ATM hardware and software. 

As for biometric identification technology in general, Kaspersky has recommended that, for now, it should be  using it as a secondary protection method that complements other security measures, but does not replace them completely.

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