Note 3: Segment information

The Telkom group previously presented two reportable segments, namely:
i) Telkom which provides fixed-line access, fixed-line usage, data communications services, mobile voice services and handset sales; and
ii) BCX which provides business solutions based on information and communications technology and runs ICT systems and manages products, services and solutions.

In the previous financial reporting period, the group reported its aspiration to implement a more flexible and agile operating and reporting model to manage performance and allocate resources. The executive committee, which has been deemed as the chief operating decision maker (CODM), in its journey to fully operationalise this aspiration, has started to assess the performance of the business units on a net operating revenue level and make decisions about the allocation of resources for fixed business, mobile business and BCX at an EBIDTA level. The financial information reviewed by the CODM excludes inter segmental revenue and cost allocations as the transfer pricing principles continue to evolve.

               
  Openserve Consumer Enterprise BCX      Other Eliminations Consolidated
September 2016 Rm Rm Rm Rm Rm Rm Rm
Revenue from external customers 2 470 7 234 6 383 3 617 533 - 20 237
Payment to other operators             (1 274)
Cost of sales             (5 114)
Segment net operating revenue 2 044 5 389 5 636 1 173 225 (618) 13 849
Fixed Business 2 044 4 558 5 529 - (39) 123 12 215
Mobile Business - 831 107 - - 12 950
BCX services - - - 1 173 - (714) 459
Other - - - - 264 (39) 225
               
Reconciliation of operating profit, profit before tax   Fixed
Business		 Mobile
Business		 BCX Other*  Eliminations Consolidated
Segment net operating revenue   12 092 938 1 173 264 (618) 13 849
Other Income   188 2 57 175 (21) 401
Operating expenses   (5 207) (736) (919) (2 755) 639 (8 978)
Earnings before interest, tax, depreciation and amortisation (EBITDA)   7 073 204 311 (2 316) - 5 272
Depreciation, amortisation, impairment, write-offs and losses             (2 680)
Operating profit             2 592
Investment income             128
Finance charges and fair value movement             (378)
Profit before taxation             2 342
* The EBITDA loss is mainly due to Corporate Centre operating expenditure.              
Other segment Information              
Capital expenditure on property, plant and equipment and intangible assets   2 654 758 108 62 - 3 582
               
  Openserve Consumer Enterprise BCX      Other Eliminations Consolidated
September 2015 Rm Rm Rm Rm Rm Rm Rm
Revenue from external customers 2 600 5817 7 330 489 546 - 16 782
Payment to other operators             (1 396)
Cost of sales             (1 981)
Segment net operating revenue 2 148 4 323 6 573 141 287 (67) 13 405
Fixed Business 2 148 3 704 6 496 - (39) (34) 12 275
Mobile Businesss - 619 77 - - - 696
BCX services - - - 141 - (1) 140
Other - - - - 326 (32) 294
Reconciliation of operating profit, profit before tax   Fixed Business Mobile Business BCX Other* Eliminations Consolidated
Segment net operating revenue   12 309 696 141 326 (67) 13 405
Other income   250 4 5 337 (31) 565
Operating expenses   (5 352) (754) (124) (2 798) 98 (8 930)
Earnings before interest tax depreciation and amortisation (EBITDA) for reportable segments excluding voluntary packages   7 207 (54) 22 (2 135) – 5 040
Voluntary packages   (1 523)
Depreciation, amortisation, impairment, write-offs and losses             (2 615)
Operating profit             902
Investment income             116
Finance charges and fair value movement             (334)
Profit before taxation             684
* The EBITDA loss is mainly due to Corporate Centre operating expenditure.              
Other Segment Information              
Capital expenditure on property, plant and equipment and intangible assets   1 881 201 36 50 - 2 168