Telkom’s longer-term growth prospects concern us. Management has done well to right-size the cost base and will likely continue to do so over the medium term. The right-sizing has, however, not offset the declining margins arising from the evolving revenue mix. Low margin mobile continues to be the revenue driver, but we think that there is room for reducing the direct cost base in this segment. Our assessment of prepaid mobile data pricing shows that Telkom can significantly lower data bundle pricing and still remain the price leader.