Telkom South Africa has reported an 8.4% rise in operating revenue to ZAR51.62 billion (USD7.32 billion), though operating profit fell back 1.4% to ZAR14.47 billion. The fall in earnings was attributed to a 12.3% increase in operating expenses. Unlike many western telcos, Telkom is still seeing growth in its fixed line operations, with sales up 1.7% to ZAR33.3 billion. The firm’s CEO Reuben September says the growth has come in spite of tariff decreases and growing competition from cellcos. He adds that Telkom faces a ‘challenging period’, with new competition from second national operator Neotel and ‘significant pressure’ on its product pricing. Though fixed access line numbers, including PSTN connections, ISDN channels and payphones, dropped 1.4% to 4.64 million, the number of ADSL subscribers jumped 78.1% over the year to 255,633. Telkom’s 50%-owned mobile subsidiary Vodacom reported a 20.9% increase in revenues to ZAR41.15 billion (see separate story in today’s CommsUpdate).