Good, good afternoon, everybody, and welcome to The Interim Results Presentation for The Half Year That Ended on The 30th September, 2021. With me, I have our Group CFO, Dirk Reyneke, and also our CEO designate, Mr. Serame Taukobong. And he'll be with us for the rest of the day today as we present and also take the Q&As. I'll start with the operating environment that underpins our results before I take you through to the different performance outcomes of the different businesses over the last six months. It's been a very tough trading environment over the last six months. Our view is that the economy has remained very, very weak, consumers have come under a lot of pressure, and we've had quite a number of episodes over the last couple of months. We've had uprisings out in KZN and Gauteng.
We've had COVID that continues to provide lots of challenges to our people. We also saw increased competitive activities in the period. Most of our competitors have, in a sense, followed a lot of what we have been doing over the last two, three years. And last but not least, we saw a regulatory environment, which also remains very, very uncertain and unpredictable. If you'd recall, ICASA set up an ITA process in December of 2020, and that was set aside following a court ruling, which Telkom had initiated earlier this year. One of the things that has been a very, very difficult thing to manage was the level of productivity during the COVID-19 period. One of our most important priorities was the wellbeing of our employees.
At the heart of it, we had to make sure that our employees are well looked after. We had to make sure that vaccination programs are set up. We had to make sure that the work from home plans remain, solid and robust. Amongst other things that we initiated was a partnership with Dis-Chem, where we embarked on a vaccination drive, which saw many of our employees and their family members receive, vaccines. During this period as well, we unveiled our hybrid work policy, which defines the workplace as both company premises and also employee residences. We enhanced and helped our employees with tools of trade to work from home, and at the same time, provided the appropriate financial support for home office equipment.
We certainly do support government's effort with regards to the COVID-19 vaccination program and the Business Unity of South Africa initiatives to ensure that access to vaccines for all South, South Africans remains primary. I'll now go through high-level performance of the underlying business units against key strategic objectives that we had laid out before. I'll start with our consumer business. And maybe even before that, just at a broad level, despite very, very tough trading conditions, our view is that we delivered a very solid operational performance. Why do we say that? Our active mobile customers grew by 18% to 16.3 million customers. We also grew our mobile broadband customers by 10.3% to 10.6 million subscribers.
We've now passed more than 700,000 homes with fiber, which is essentially about 54% improvement. Almost 60% of our customers now are on new generation broadband technologies. As we begin to see that inflection point, where most of our customers on a fixed broadband are more on new generation technology than legacy technology. We also saw a massive improvement as well from our SwiftNet business in terms of our external customers. At least now, 56% of the customers in SwiftNet are external, and we have a tenancy ratio that is about 1.5 times.
So all of these metrics actually indicate that our strategy is on track, we're consolidating the gains that we have made in the last couple of years, and I think we're setting ourselves up for the next thrust in terms of how we take the business forward. I'll start with our consumer business. The consumer business has had three areas of focus, and those don't change. The first one is, how do we consolidate on our mobile growth? Secondly, how do we drive high-speed broadband? Thirdly, how do we expand the network footprint?
With regards to just the overall performance, and comparing it to the first half of the prior year, despite the fact that the competition got to be quite intense, our base grew by about 18.8% to 16.3 million customers, with a blended ARPU of about ZAR 92. The main contributor emanated from our prepaid base, which grew by about 23.6%, which now sits at about 13.7 million customers at an ARPU of about ZAR 67. Given the challenging macroeconomic environment. Our postpaid base held steady. We all know how people have really been struggling with all sorts of impact on the economy, whether it's people not being able to go to work, the intense impact of lack of power and what it means to trading hours.
And also, we began to put in place our own efforts and plans to ensure that we can mitigate some of those unpredictable events as much as possible. The mobile business as well delivered a very, very strong service revenue growth of almost 7% to ZAR 8.8 billion, while our EBITDA exceeded ZAR 3 billion mark, spurred on by data connectivity and needs of our base. Our mobile EBITDA margin now sits at 29%, which is in line with our expectations as a management team. What has been very important is that we have been focusing a lot, not just on growing the broadband traffic, but also on how we monetize the broadband traffic. The traffic in this year, in the prior year, was marked by a big surge in demand, especially when we entered the first wave of COVID.
We've been able to see that we've been able to sustain the traffic levels over the period, and we've maintained it around about the 480 petabytes mark. Against this framework, we still managed to grow our data revenue by about 6.1% to ZAR 6.4 billion. Our broadband base increased by about 13.3% to 10.6 million subscribers, as I've indicated, of which about 9.1 million of them are smart users. We continue to invest in the network, and this ongoing network investment is very, very crucial as we look to expand it, make it a lot more resilient, and provide as much redundancy on the network as possible.
Our footprint was extended by about 12.2% to 6,910 sites over the period, where our 4.5G sites increased by about 42%. We maintain a fiber backhaul percentage of between 70%-80%, which means that that many in number of our towers use fiber as backhaul, and this paid off very, very well, allowing us to effect quick backhaul upgrades for capacity, where additional traffic was anticipated. We will continue to invest on our own network whilst we use roaming agreements to supplement our network footprint, allowing our customers to access three networks, and also using that to catalyze much better roaming costs, as we move forward. I'll speak a bit more about the roaming agreements later on. BCX.
BCX strategic focus also is around three issues: How do we grow the IT business? How do we evolve the converged business as much away from fixed voice to broadband? And how do we reduce the cost to serve? The financial performance of BCX remains under pressure, and the team really knows that. The revenue for the period declined by about 6% to about ZAR 7.5 billion, mainly impacted by the IT segment, which continues to be under pressure, whilst the converged comms business is starting to stabilize a little bit. Despite cost management, which resulted in direct costs declining by about 13% and OpEx declining by about 4%, EBITDA declined by about 7% in the period to about ZAR 1 billion or so, as the savings were not sufficient to offset the decline in revenues during this half.
The converged comms now appears to near stabilization. And what do we mean by that? The business, as you know, has been hemorrhaging revenues and margins over time with a decline in fixed voice. Converged communication declined by about 4.2% to ZAR 3.5 billion, primarily owing to declines in enterprise data consumption as employees continue to work from home, hardware delivery backlogs as the result of the global chip shortage, that we have experienced. However, this performance, despite that difficult period, was slightly cushioned by the sort of slowing down decline in fixed voice. Impressively, 63% of data access revenue in next-generation revenue was generated over this period. The IT side remains under pressure.
IT business revenue declined by about 8% to ZAR 3.8 billion, mainly attributable to delayed projects, as indicated earlier on, largely through the economic slowdown that we have seen over the period. Backlogs resulted, which are caused by the global supply chain constraints, especially the shortage of chips, together with the uncertainties resulting from the effects of the recent uprisings that we had, as indicated in KZN and Gauteng. The uprisings that we experienced in KZN and Gauteng, in particular, added not just to the uncertainty, but actually complicated already a constrained economy, and constrained enterprise spend. I'll now move on to Openserve. Equally, Openserve as well, has three areas of focus: How do they modernize the network, transform service delivery, and commercialize the network? We've seen a stabilizing financial performance in Openserve.
Revenue declined marginally by 1.8%, with the period delivering about ZAR 6.7 billion in revenue. This was supported by the demand in the carrier business, which grew by about 12.8%. However, it was negatively impacted by the pandemic, which is still evident in the challenging performance of the enterprise side of the business and the small and medium businesses. Our cost transformation in this area has been more than heroic, which resulted in an overall EBITDA improvement of about 11.1%, went to ZAR 2.1 billion over the period, and the EBITDA margin expanded by 370 basis points to about 32%, despite the marginal decline in revenue. Fixed broadband evolution.
Our investments in our network enabled us to carry about a 12% increase in fixed broadband traffic. We continue to see a much greater adoption of next-generation high-speed broadband, about a 17% increase year-on-year, at least on 10 Mbps or more. During this period as well as indicated earlier on, we saw an inflection point, where almost 60% of our broadband subscribers now enjoy the speed and reliability of what we'd call new generation technology end-to-end. Therefore, this would lead to: How do we accelerate investment in fiber? We have really, really pushed over the period. Our rollout of fiber has been accelerated. We increased the number of homes passed with fiber by 54.2%. Now, we have passed more than 700,000 homes with fiber, which is popularly known as FTTH.
We continue to focus on the provisioning of a connected home to our FTTH network, and increase the number of homes connected by 34% to 332,000, which actually represents a connectivity rate of about 47%. This remains the highest in the market, and as indicated on a full year basis, we would want it to be between 50%-55%. These connected homes have enabled us to have an activation of more than 428,000 services, which include broadband and other value-added services like VoIP, and intercom, and security. We are confident that with the large inventory that we have now been able to build, this will assist us in making sure that we can be able to execute on our strategy in the provisioning of the connected home at pace. I'll move on to SwiftNet.
SwiftNet has also three areas to focus on: improve the tenancy ratio, execute on the build plan program, and expand on the range of products and services that they can be able to provide to their key customers. The financial performance of this business remains very, very robust. Revenue grew by about 7.3%, to ZAR 674 million, which has been driven largely by improved tenancy. EBITDA grew by almost 10% to ZAR 532 million, with an EBITDA margin expanding by two percentage points to almost about 80%, underpinned by efficiencies. In essence, the approach by this team has been consistent CapEx deployment. What enables it?
It's enabled by very, very strong operational cash flow generation that supports organic growth, program management, and tower build service providers, ensuring very, very efficient project execution and sufficient gearing capacity to pursue future organic and inorganic growth. As indicated in the earlier slide, there has been a very, very marked improvement in the productivity of the portfolio and tenancy ratio. We now have in excess of 140 new towers over the period. Seventy-four of those sites were initiated in full year 2020, and now are part of the portfolio. About 66 towers, which were initiated and built in the first half of this year, are now part of the portfolio, and we have another 110 or so which are planned for in the second half of this year.
We have decommissioned about 147 sites, predominantly non-commercially productive, that are non-tenanted, and potentially also would not be viable to use on a commercially productive basis. The tenancy ratio remains steady, as indicated earlier on, at about 1.5 times. Our returns has been a very, very important focus for us in terms of, how do we make sure that this business continues to deliver on robust returns? What has been important has been overall, how do we make sure that we have a very disciplined capital investment program? We are now sitting at about 22% CapEx-to-revenue ratio in terms of the towers business, and I think that begins to demonstrate how an attractive investment asset class our towers are positioned for in terms of growth going forward.
The ROIC exceeds WACC, demonstrating positive investment returns as indicated. A 22% CapEx to revenue ratio. Our balance sheet remains lowly geared at this point, and we will introduce debt into the business as we deem appropriate. Very, very high EBIT margins at about 77%. Our cash conversion ratio remains very strong at about 91%, translating our strong EBITDA into cash. The tower asset class has proven and demonstrated strong performance, and presents an opportunity for high shareholder rewards. I will now hand over to Dirk, who will take us through the financial overview, and then I'll come back to talk a little bit about value unlock, and also about the outlook going forward. Dirk, over to you.
Thanks, Sipho. Thanks, Sipho, and good afternoon, everybody. I'll take you through the financial overview for the six months for the half year. If we look at it overall, Sipho has referred to the tough trading and economic environment that continues. We ended the half with strong earnings performance, underpinned by flat group revenues with a decline of just 0.5%. EBITDA growth of 1.2% and a margin expansion of 5 percentage points, 5 percentage points. A significant reduction in finance charges, Forex losses, and fair value movements, which then resulted in the 30.4% year-on-year headline earnings growth. Healthy net debt to EBITDA ratio of 1.1 times. The slight increase above our guidance, really relating to the lower cash balances and additional IFRS 16 leases. I'll come back to the cash balances.
Then, as I say, in line with our expectation of the half one performance, negative free cash flow of ZAR 839 million, largely as a result of prior year Q4 CapEx that was settled in half one this year, staff incentive pay- incentive payments, and working capital movements. If we look at the revenue, the group revenue was sustained at ZAR 21.3 billion, with the mobile stream continuing to be the driver of growth. Sipho has referred to the mobile service revenue growing by 6.8% to ZAR 8.8 billion, underpinned by an 18.8% year-on-year growth in active customers to 16.3 million, with a blended ARPU of ZAR 92.
This growth was spurred on by the prepaid customer base that grew by 23.6% to 13.7 million, at an ARPU of ZAR 67 rands. The slowdown in economic recovery and global supply chain constraints, which has resulted in computer chip shortages, has resulted in a further 7.9% decline in IT revenues at BCX. It's pleasing to note that while we continue to see a decline in fixed voice and fixed data, as customers continue to migrate to next generation technologies, the rate of decline has significantly reduced. Fixed voice decline in prior period was 29.5%, and fixed data, 9.5%, which has now reduced to 14.9% and 5% reduction, respectively, in the current period.
We continue to commercialize our current mast and tower portfolio with a growth of 5.1% in revenues to ZAR 374 million, and this was really underpinned by the improving of the productive tenancy ratio from 1.52 times in the prior period to 1.55 times in the current period. If we look at a little bit deeper at the mobile direct expenses, underpinned by our sustainable cost management program, we continue to optimize our mobile direct expenses. Yes, we've seen a 33.8% increase in mobile handset revenues, which results in increase in direct costs of roughly 2.5%. Having said that, our total mobile cost efficiency ratios on the graph to the right have continued to improve, demonstrating efficient growth of the mobile stream.
This was enabled by optimizing roaming cost as we maintain stringent roaming traffic thresholds and migrate traffic to our own network. Strong earnings growth. We've seen a strong earnings growth, with basic earnings per share increasing by 27.3% to ZAR 2.76, while headline earnings per share increased by 30.4% to ZAR 2.855 compared to the prior period. This increase was mainly due to the significant decline in finance charges, fair value movements, and foreign exchange losses.
If we look at the CapEx acceleration, we have and we will continue to invest in our key growth areas, being fiber and mobile, and then also in the, in the mast and tower space, with a capital investment increase of 22.7% to ZAR 3.6 billion in the current year, now representing a CapEx to revenue ratio of 17%. The fiber services now make up 45% of the total CapEx executed, compared to only 35% in half one of full year 2020, and 32% in the prior period.
Homes passed increased by 34.3% year-on-year, in line with our strategy to increase our market share in fiber.... Going forward, we will continue to focus on expanding the FTTH footprint, while simultaneously connecting premises to ensure that we get the high connectivity rate, currently at 47%, back to above 50%. Free cash flow generation, I think the slide that most are waiting for, and I want to say, as per expectation, the cash generated, free cash flow in total was ZAR -839 million, compared to ZAR +211 million in the prior period. We understand why, and if you unpack on how that's happened, cash generated from operations decreased from the comparable period by 9%, largely due to changes in working capital and staff incentive payments for full year 2021 that wasn't there in the comparative period.
The decline in finance charges is largely as a result of the debt repayments of ZAR 1.1 billion in the prior period, and a further ZAR 100 million in the current period. The prior year taxes paid includes once-off payments of ZAR 1.2 billion relating to prior year outstanding liabilities. CapEx paid includes the payment for CapEx executed in the fourth quarter of the prior year. With our 90-day payment terms, that cash was only paid out in the current period. And I say that is the overall free cash flow, then, down from ZAR +211- ZAR -839.
If you look at the healthy balance sheet, our solid underlying performance and our conservative funding approach enabled us to strengthen our balance sheet by repaying maturing debt of approximately ZAR 1.1 billion in the prior year, and a further ZAR 100 million in the current period. In the current period, we continued to reduce the debt in line with our debt maturity profile. We've got adequate balance sheet capacity to fund our strategy, with our net debt to EBITDA stable at around 1x, and driven by lower cash balances and additional IFRS 16 leases. We target to maintain annual debt redemptions at or below ZAR 2 billion per annum to manage our refinancing profile, and thus reduce refinancing risk. And I think important, our floating rate debt versus fixed rate debt is currently at 52-48 ratio.
This marginal change in the fixed versus floating was largely as a result of the repayment of maturing debt. The higher floating debt has enabled us to benefit from the low interest rate climate, thus reducing finance charges. If I then just look at what are the key initiatives for the second half of the year around growth, the revenue, improved profitability, and free cashflow. In half two, we target to grow our revenue streams ahead of half one performance, resulting in a total year-on-year growth in revenue. This is largely underpinned by the fulfilling of IT back orders, driving the connection of homes that we've now passed in half one, and aggressively driving our mobile customer value management initiatives, as well as implementing a mobile regionalization and township growth strategies.
In terms of profitability, we will continue with our relentless efforts to contain cost at below inflation. The addition of the MTN South Africa as a second roaming, national roaming partner, effective from the first of November, will also assist in optimizing our roaming spend. Then, in terms of free cash flow, we remain confident that the free cash will normalize in the second half of the year, and we will be able to achieve a positive free cash flow for the year. In terms of capital allocation framework, we will continue to maintain a disciplined capital reallocation framework, thus growing shareholder value over the long term. Returning cash to shareholders remains a key element of such a capital allocation framework. The board remains committed to reinstate the dividend policy by the end of the current financial year.
The board believes that given the advanced stage of the separate listing of SwiftNet, which is expected to be concluded by the end of the financial year, and the management transition, that the board will be better placed to take a holistic view of the capital allocation and make an announcement on the dividend policy at the end of the financial year. I will conclude there and hand back to Sipho to talk to us about value unlock. Thanks, Sipho.
Thanks, Dirk. Thank you very much, Dirk. So we had spoken in the past about value unlock, and I'd want to recap a little bit about the value unlock strategy. It is premised on our market cap, not reflecting the intrinsic value with our infraco assets that trade at much higher multiples that are not recognized, number one. Secondly, other than expecting proceeds, which could be used to reinvest in the business and/or rebase the balance sheet, and/or return the cash to shareholders, we also want to address some strategic impediments in some of our business units. In some of our business units, we need to address both scale and capability, and/or growth. So that has been at the heart of how we have been thinking about our value unlock strategy.
In essence, our valuation not reflecting the intrinsic value of the company, our InfraCo assets not sufficiently recognized in that valuation. Thirdly, InfraCo assets tend to trade at a much higher multiple, and how we intend to use those proceeds, either return the cash to shareholders or rebase the balance sheet, or reinvest in the business. I'll just share with you some of the work that we have done that actually indicates that, overall, if you look at it on an average basis, the capital markets have been able to demonstrate recognition and appreciation of the infrastructure businesses, and actually, they tend to trade at higher multiples. Telkom has all of the infrastructure businesses, such as data centers, masts and towers, and a fiber co. These infrastructure businesses present significant value unlock opportunities for Telkom.
If you just look at the chart that you'll be seeing on your screen, data centers tend to trade at an average EV/EBITDA multiple of about 18% or so. Tower cos tend to trend at an EV/EBITDA multiple of about 19%, and fiber cos tend to trend at an EV/EBITDA multiple of about 14%-15%. We remain committed to realize that value, so that all of these assets can be able to demonstrate the value that they carry and be able to deliver in a way that we've thought through strategically. I'll speak a little bit about SwiftNet. We have actually indicated in the past, and we've made specific announcements with regards to SwiftNet and the listing that we will be pursuing with regard, with regards to SwiftNet.
The T name for SwiftNet will be SWM. The main board will be around the TMT sector, the float will be a minority interest, and the time frame would be by the end of this financial year, and we are on track to be able to achieve that. We've made a lot of progress in respect of the listing of Swift, SwiftNet, which, as a reminder, is our separate mast and tower business, including having had, but not limited to, formal engagements with the JSE in this regard, which actually then supports some of the points that I made earlier on. We are expecting that this listing will be concluded before the end of the financial year.
Obviously, subject to market conditions, which we continue to monitor, especially in the context of how we believe the overall company is valued, and if that valuation is a fair reflection of where we are. We believe that by doing this, and listing SwiftNet, we will be affirming the valuation of the mast and tower business, and its overall contribution to the Telkom group. Maybe just to recap, our mast and tower portfolio, it's an independently managed tower co with a total of 6,218 tower sites. We have a solid portfolio of about 3,834, which are commercially productive tower sites providing national coverage. The balanced tenancy split between Telkom as an anchor client, which is Telkom Mobile and Openserve, and third-party tenants.
I mentioned earlier on that, they have about 56% of their customers being external customers. A further 2,100 sites are in permitting stage to enable future tower builds. So we can see the growth pipeline, we can see the momentum, and we can see the financial metrics that support the intention of listing this business. When we list the company, it will have an independent board and a strong management team. The majority of the shareholding will be by Telkom. Telkom will have 3 representatives in the beginning, which will be the Group CEO, myself, the CEO designate, Serame Taukobong, and our Group CFO, Dirk Reyneke. And we'll also have 4 independent non-executive directors. And from the SwiftNet side, the Group CEO and the Group CFO would obviously be on the board.
We'll also have an independent chairman of the board, and we'll have a couple of committees, like the risk committee, the investments and transactions committee, the RemCo, and the NomCo. As we've indicated, Lisiba, who currently heads up the Gyro team, and the member of Group ExCo, will continue to be the CEO of SwiftNet. Certain functions will be shared with the group initially, but we expect to internalize those functions in the next three years or so as the business matures. What is the investment case for SwiftNet? You'd have a supportive strategic shareholder in the form of Telkom. Telkom has a very, very clear strategy going forward. It is strategic, and it's a long-term shareholder. Telkom supports fully the SwiftNet strategy, as it has been articulated in the past.
Thirdly, there would be an independent board and a deeply experienced management team that will be running the business. It's an attractive asset class. That would be the first time that it's available on the boards in South Africa. Tower cos trade at a much higher multiple than what our current valuation indicates. TowerCo has actually outperformed Telcos in the capital markets from a valuation perspective. It's a proven model, and it's a scalable model, and we have both been able to demonstrate in the management team and the growth pipeline that exists. The returns are very, very strong, very, very high EBITDA margins, very, very compelling return on invested capital, very, very lowly geared, and generates the cash conversion is very, very strong.
And the strategy to drive growth in SwiftNet remains increasing the tenancy ratio on the existing portfolio, acquiring strategic assets, and building new towers in line with the demand by mobile network operators, expanding the range of products and services offering, and obviously actively preparing for 5G rollout, which they have been doing in the past. I'll talk a little bit about the outlook, and before I do that, just to make sure that we continue to articulate that we have managed the transition process very, very effectively. The transition has been well thought out, and I think that we have two people who will be able to lead this company over the next 5, 10 years, and I'm pretty sure they'll do well.
Serame was appointed on the first of October to be the Group Chief Executive Officer designate. 18 years of experience in telecoms in him, joined in 2018, previously with General Electric. And his replacement in consumer, 10 years' experience in both telecoms and financial services, also joined in 2018, previously with Standard Bank. So Serame will take over as the Group Chief Executive Officer on the first of July 2022. Him and I have been spending a lot of time to make sure that we have a very, very seamless transition. I remain accountable for the delivery of the full year performance for 2022 and making sure that all the strategic goals that we have set are met.
And then one of the things that we will be able to do is that once he settles in his role, he'll then be able to unpack, in a capital markets day, how then he intends to take Telkom, even to greater heights going forward. Lunga has started his role, he obviously has a very, very tough task, in terms of running both our consumer business and our small and medium business, and there's quite a lot of efficiencies that we are looking for there, but I also think that the team has very, very clear plans, as to how they will manage this. In a couple of weeks back, we announced that, we have adopted what you'd call a dual national roaming strategy.
We entered into a roaming agreement with MTN South Africa, and MTN South Africa now will be the second roaming partner to Telkom, effective the first of November. The first partner that we have is Vodacom. The roaming agreement covers 2G, 3G, and 4G, and will include seamless handover between Telkom and MTN networks, which is similar to the roaming agreement we have with Vodacom. Telkom, in essence, now will have access to three networks. Our customers will have access to three networks, being able, therefore, to give both our retail customers and our enterprise customers the best there is to offer from a coverage perspective and from a service perspective or an experience perspective, either through our own network or through either of our roaming partners.
Importantly, to also note that these roaming agreements will optimize our roaming spend and will support the mobile business, EBITDA margin improvement, and Telkom's overall EBITDA medium-term guidance, which we remain committed to. And we've looked at our business through three lenses over the last couple of years, each of those businesses. And what has been important for us is the lens of what are the scale capabilities that this company, this business requires? Is it able to grow? Is it able to scale? And what are the capabilities that they have? And that particular tripartite approach has been very, very important.
If you look at our mobile business, it has been doing quite well, but it was subscale for a long time, and I think now they've been able to get to the requisite level of scale, and we think there's a bigger opportunity for them to play into going forward. On the other hand, if you look at BCX, it's a scale business in the enterprise market, but what they really require to be able to drive growth are the right capabilities within the business. Equally, if you look at Openserve, it's a large business, it's a scale, they've got the right capabilities.
I think now they have been able to get to the inflection point that is required, and we're beginning to see them driving the growth in new generation product services that we've always been asking them to do. So as we do that, we have spoken in the past about the structural separation of Openserve, which continues, and we'll be looking at it in terms of the next frontier of value unlock. But also another thing is that with five years on, having acquired BCX, and strengthened our IT capability. BCX has been incredibly helpful in making sure that we can diversify our revenue streams in our enterprise, not just rely on converged communication, but also bring IT services in it.
So the initial investment thesis, in essence, what we still see continuing to happen, various IT segments converging with connectivity. The combination of the entities bringing a differentiated offering in the market, diversifying our enterprise revenue. Our enterprise business at the time had a massive dependence on voice, especially fixed voice, and a one-stop-shop value proposition for enterprise customers. What are the gains to date that we have made? Growth in converged communication capabilities, including SD-WAN, unified comms, sales wins in the chosen industry verticals that we have seen. And lastly, increased traction in cloud solutions and digital platform services.
The strategic intervention options that we are looking at, we're looking at very, very key strategic partnerships from an IT capabilities and skills to focus on the growth areas, and increasing scale through access, to new markets with those strategic partners, as anchor to our partnership. And we're also looking at an alternative or a complementary option, to make use of current market conditions to further consolidate niche IT service companies. Unfortunately, the performance of the business was largely impacted by the weak economy environment in South Africa, which we have actually seen over the number of years, declining legacy fixed voice revenues. But we actually believe that the time for that strategic equity partnership, and being the catalyst for some form of niche IT consolidation, is here.
And those would be some of the big strategic thrusts that will be coming through over the next couple of months or so going forward. So we'll bring our results presentation to an end now. Safe to say that it's been a very, very tough trading environment over the last six months, but the business remains solid at a fundamental level. We've been able to make sure that we have a disciplined capital allocation. We manage our costs in a very disciplined way. We have embarked on the value unlock strategy. We think that will start to pick up quite a lot of momentum. We're very clear what we wanna do with Openserve. We're clear what is the strategic equity partnership that BCX will require. What is the next frontier in terms of broadband and broadband participation?
Despite it having been a very, very tough two years, the economy and COVID, included, we're very, very resolute in terms of achieving our strategic objectives. Thank you very much. We'll now move on to taking some Q&As. I think some of the questions will be posted online, and I think some of them, there's a call that has been set up for us to take those questions. Thank you very much.
Firstly, to the operator, do we have any questions online? We have a question from John Kim of UBS. Can you please give me a sense of market dynamics in prepaid? Should we consider further ARPU declines with net adds in prepaid? How do you see the contract evolving in H2? Thanks.
Sure.
Serame?
Thank you, John. I think the market dynamics in prepaid are pretty much in line with our expectations. We do see continued subscriber growth, as we've indicated. Prepaid ARPU has stabilized to the pre-COVID levels. We expect it to be within the range of ZAR 67-ZAR 70 a month.
Thank you, Serame. The next question is from Amit Singh with SwiftNet continue to be consolidated in Telkom or will be accounted for as an associate? Dirk?
Yeah, we only plan to sell minority stake at this stage. We will retain majority, so SwiftNet will certainly still be consolidated into Telkom Group.
Thank you, Dirk. To Sipho, we getting a lot of questions on MTN, the article that broke over the weekend. Please, can you respond to that? Thank you.
Yeah. So, Yeah, I mean, you saw the article, and, unfortunately, we, we can't comment much on what has been in the media, except to say that there is no deal that is being considered by Telkom, both being looked at by the management team or the board. And I think we will probably just say that, but as we speak, there is no deal that I'm looking at or the board is looking at, in relation to MTN. Thank you.
Thank you, Sipho. Back to the operator. Do you have any questions on the line for us?
Yes, we do. The first question comes from Adam Fox-Rumley , of HSBC. Adam, your line is open. You can ask your question.
Hi, can you hear me?
Yes, we can. Please go ahead.
... Sorry, this is [audio distortion] . My first question is on your latest roaming deal with MTN. Given that you already had a deal with Vodacom, I'm just wondering if you could explain why did you need to do another deal with MTN? And in that situation, do you also have minimum commitment to both the net, you know, providers? And is there a chance that because of this minimum commitment, the margins might actually be under pressure in the coming period? So that's the first question.
Secondly, just on the CapEx side, given, you know, the continuous increase in the importance of, you know, data both on the fixed and the mobile side, and also advent of 5G, I can see that, you know, you're investing a lot in fiber and the 4.5G of so far. But as 5G starts to become more mainstream, what are your plans around that? Do you think a bigger investment will be needed to compete better on the 5G side as well? Thank you.
Yeah. So I think on the roaming, our approach from the beginning was never to have an exclusive agreement. So it gave us an opportunity to then look at and investigate both telco operators. So the key thing for us, in terms of the question you asked about the minimum commitments, it falls within our current expected ranges of roaming spend. Secondly, it does give us a better leverage for customer experience, 'cause it's essentially we're now roaming on both MTN and Vodacom, and it contributes further to making sure that our roaming cost reduces and improves our efficiency, which is translating in our EBITDA. Thank you.
On the CapEx, in terms of the 5G readiness, as Sipho indicated in our slides, our backhaul for all our sites ranges between 70%-80% of fiber backhaul, which is a key enabler for 5G. If we look at the sites that we've integrated, particularly 4.5G, 4.5G sites currently represent over 81% of our sites, making sure that we are gearing ourselves up for 5G. Thirdly, in terms of the work being done in SwiftNet or Gyro, a big focus on improving 5G projects, particularly with indoor coverage, and we'll talk about those opportunities as we go along. Thank you.
Yeah, and also, I mean, just on the fiber rollout, right? So, the amount of homes that we have passed with fiber begins to enable you to play significantly in 5G as well. So it is something that is absolutely in our sights. We are very, very clear around the frontier of data, and that's why we've always been focused around data growth. And I think, I think we've, we've done well to manage the migration of our revenue pools away from fixed voice to largely new generation, services, whether it's on the fixed side or even on the wireless side, to make sure that our relative exposure to data, fixed or mobile, is very, very strong, informed by, software-defined networks and network virtualization, but also in terms of, the IT services that we have.
So the firm is totally de-risked now away from fixed voice. And I think that as we're now getting into the next frontier, I think that the machine is properly set up for that. Thanks.
Thank you, Serame and Sipho. To the operator, we have time for one more question, please. Thank you.
Thank you. The next question comes from Jonathan Kennedy- Good of J.P. Morgan.
Good afternoon, and thanks for the opportunity. Just wanted to touch base on the performance on the mobile business. If I recall, you know, at year-end, it seemed as though management were a lot more confident that we had achieved kind of mid-teens growth in revenue there. Now we're at kind of 6% here. Are competitive conditions changing materially in the business? I think you've commented on H2, but just trying to understand exactly what we should expect in the second half, from a revenue perspective. So that's question one.
Then too, just on SwiftNet, can you give us a sense of what the current NAV of the tower portfolio is on the books at the moment, with some indication of what kind of debt levels you think are appropriate for that portfolio going forward?
Okay. Thank you, Jonathan. I'll take the mobile question. I think, first of all, the mobile growth has to be taken from a telecom perspective against the high surge we saw last year, in terms of a COVID bump. I think what's important for us is we've maintained certain those levels of revenue and grown. Secondly, you're absolutely right. Competition activity was increased, I think primarily as a result of competition having to respond to the regulatory requirements of them to drop prices. We are now fully aligned in terms of where those price points are. We are responding, and what we're seeing in the second half is certainly a better improvement. I think in terms of the forecast going forwards, we are still looking at making sure that we are in the early teens.
Literally, I'll say from high single-digit to low teens is the focus where we are on our mobile revenue growth. Thank you.
... Do you want to talk something? Perfect.
Thank you. There are no further questions on the line.
Now there's the second question that we deal with.
Yeah, I think, I think, I think the second question, just, Jonathan, if I heard that right, it was around net asset value.
Yeah.
I think, we're not gonna disclose numbers now in terms of the SwiftNet portfolio while we're busy with the IPO process. I think all those will be disclosed in the pre-listing statements that will probably be issued soon. But I don't think that's really, you know, the valuation of the portfolio will not necessarily be based on net asset value. It will be done on a EBITDA earnings multiple, in line with the slide that Sipho showed in terms of the multiples that we look at for comparable industries. So, I mean, I can take that offline in the one-on-one discussions further, but we cannot disclose more detailed numbers currently around that transaction.
Yeah.
Thank you.
Yeah. So maybe just-
Thank you.
Okay, thanks a lot, Jonathan, and I think there'll be further engagements, I think tomorrow or something, and, a couple of the one-on-ones, and we can be able to unpack, where appropriate with yourself. So thank you very much. I mean, as indicated earlier on, the first six months, and the environment has been very difficult. Personally, I remain very, very, enthused by how, the business has been able to cope under very difficult circumstances. You always look at how you perform, not only when times are good, but also when times are very, very difficult, and I think, the overall team has acquitted themselves. The platform is very, very solid.
We're very, very confident around the second half of the year in terms of where we will end up, but also setting up this business for the sort of future that we think it deserves. Thank you very much, and have a good day further.