Telkom South Africa has announced that it is writing down the value of its assets by R12 billion (US$1.2 billion) which it puts down to increased competition from the other mobile networks, and the lower valuation of its legacy landline network.
The company also said that the migration of services from legacy assets to new technologies which will rapidly escalate over the next few years and further reduce the returns from some of the older network components.
The impairment charge is a non-cash item and it will not impact the significant cash flow (EBITDA), which the Group generates from its operations. It is akin to an accelerated depreciation charge..
Telkom will release its results for the year ended 31 March 2013 on 14th June 2013.