Despite missing its annual target, BBI delivered a stronger-than-expected final quarter, generating revenue of R290 million.
State-owned broadband infrastructure provider Broadband Infraco (BBI) ended the 2025/26 financial year below its revenue target despite a strong fourth-quarter recovery.
The company says the loss of a major customer contract and delays to key government connectivity projects weighed on its financial performance.
This emerged in the company’s annual performance plan for the fourth-quarter performance recently presented to Parliament.
BBI reported year-to-date revenue of R502 million, R31 million below budget and R84 million lower than the previous financial year.
The company says the year-on-year decline was driven mainly by the expiry of its contract with the State Information Technology Agency (SITA) in December 2024, deferred revenue recognition on the SA Connect phase two and Broadband Access Fund projects, and the timing of revenue from Universal Service and Access Agency of South Africa (USAASA) projects.
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BBI said the impact was partly offset by the release of R145 million in deferred revenue relating to the SA Connect Phase 2 project.
The company previously provided core network infrastructure and connectivity services to SITA, enabling the agency to deliver IT and communications services across government.
Despite missing its annual target, the broadband infrastructure provider delivered a stronger-than-expected final quarter, generating revenue of R290 million – R115 million above budget.
According to BBI, the better fourth-quarter performance was largely attributable to the timing of revenue recognition across several projects.
National commercial revenue remained under pressure, reaching R194 million for the year, with fourth-quarter revenue of R89 million.
BBI attributed the shortfall to delays in winning back customers, customer cancellations and slower-than-expected implementation of its commercialisation strategy.
Revenue from the SA Connect programme was R14 million below the year-to-date budget because of non-performing sites and delays in connecting 713 broadband sites.
However, the company received back-billing payments for additional sites in March, helping to improve fourth-quarter revenue.
USAASA-related revenue also finished R37 million below budget for the year due to inactive sites.
In the fourth quarter, however, revenue exceeded budget by R53 million after USAASA non-recurring charges were invoiced during the period, whereas the budget had assumed the invoices would be raised earlier in the financial year.
The weaker revenue performance comes as BBI continues to grapple with financial sustainability challenges.
During the fourth quarter, the company achieved 16 of its 18 performance targets, or 89%, an improvement from 67% in the third quarter. However, the two targets it failed to achieve related to financial sustainability.
BBI said debtor collection days remain elevated at 102 days, placing pressure on cash flow, while payments to small, medium and micro enterprises averaged 55 days against a target of 30 days.
To improve its financial position, the company has outlined a turnaround strategy focused on stabilising cash flow, accelerating revenue generation and commercialising its infrastructure assets.
The plan includes renegotiating contracts and payment terms, reviewing network links to eliminate inactive assets, pursuing recapitalisation, activating new and dormant SA Connect and USAASA sites, and accelerating the conversion of sales opportunities into revenue through faster service provisioning.
BBI also aims to reduce suspended and inactive customer debt by R5.9 million over a 90-day period, while improving collections from active customers and reducing revenue-sharing payments to access network partners.
Although operating expenses finished R35 million below budget and employee costs were lower than forecast, the company said restoring revenue growth remains critical to improving its long-term financial sustainability.
