South Africa’s incumbent fixed-line operator Telkom is to spend up to ZAR6 billion (US$800 million) over the next five years to launch its first standalone mobile service, reports Dows Jones Newswires. On an earnings call yesterday, the firm said that ZAR1 billion will be spent in the first year with an eye to launching mobile services in 2010. The service will be integrated with Telkom’s existing fixed-line offerings. “There will be a fourth mobile operator in South Africa,” declared Nombulelo ‘Pinky’ Moholi, managing director of Telkom South Africa. Telkom has been looking to launch its own mobile service since divesting its 50 percent stake in South Africa’s number one mobile player, Vodacom, a year ago. CEO Reuben September said Telkom’s large retail distribution and existing fixed-line customer base would allow it to compete with South Africa’s three existing mobile networks, Vodacom, MTN and Cell C. The operator has been trialing so-called ‘fixed-wireless’ services since October 2008.

Meanwhile, the fixed-line firm is showing signs of losing customers and revenue to its mobile rivals. In the six months to September (its first period to report since exiting Vodacom), Telkom reported a 9 percent decline in South African traffic revenue. Operating revenue increased 4 percent to ZAR18.7 billion, though EBITDA decreased 12.2 percent to ZAR5.1 billion. Headline earnings from continuing operations decreased by 37.9 percent to ZAR 0.242 per share, and basic EPS moved to a loss of ZAR 0.150 per share, compared to earnings of ZAR 0.365 per share a year ago, mainly due to goodwill charges at Multi-Links, Telkom’s wholly-owned Nigerian subsidiary.