South Africa’s fixed-line incumbent Telkom said it is “continuing to explore all avenues to derisk the mobile business”, as it reported an increased loss for the fledgling operation.

Sipho Maseko, its CEO, said in a press briefing that the company is in talks with some parties about the future of the division, reports Reuters, although it is not clear what form future developments may take.

Indeed, in its earnings release, the company took several opportunities to highlight that it is keeping a close eye on the mobile business.

Despite being dominant in the fixed-line space, Telkom is a new-entrant to the mobile market, having previously been a partner in the now Vodafone Group-controlled Vodacom.

It is the smallest player, behind nearest rival Cell C, which itself lags market leaders Vodacom and MTN.

The mobile unit saw a “negative mobile EBITDA” of ZAR773 million ($76.5 million) in the first half of the 2014 financial year, 8 per cent worse than the ZAR 716 million seen in the first half of 2013.

Mobile revenue increased 55.4 per cent to ZAR926 million, with mobile data revenue of ZAR303 million, up 50 per cent year-on-year.

Data growth was attributed to increases in subscriber numbers, availability of new deals, and promotions, “in line with our strategy to focus on data”.

Operating revenue from mobile voice and subscriptions was down 20.2 per cent to ZAR225 million, while mobile interconnection revenue fell 10.8 per cent to ZAR33 million.

This was attributed to a decline in the number of contract subscribers and lower postpaid average revenue per user, the former of which was attributable to the expiry of “a large number of hybrid contracts as well as the continuation of the debtors clean-up to ensure a better quality customer base”.

Telkom said that these hybrid contracts “were generating low ARPUs”, and that the current base is “providing a more sustainable growth base than the prior period”.

Capital expenditure in the mobile unit increased 56.4 per cent to ZAR815 million, as Telkom invested in its mobile and LTE infrastructure. The increase was “a result of the first half of the prior year being a repositioning period,” it said.

In a presentation, the company said that one of its focus points is to “remove uncertainty and curtail future opex and capex” in the mobile unit.

The company actually saw a 6.9 per cent increase in active mobile subscribers during the period, to reach 1.6 million subscribers. Its total mobile subscriber base increased 17.4 per cent to 4.42 million.