Despite increased competition, what other factors contributed to the drop in Telkom’s headline earnings?

Price reductions and increased operational expenses.

‘September attributed the drop in the Group’s headline earnings to increased competition in the telecommunications landscape, price reductions as well as increased operational expenses incurred largely as Telkom accelerates building a first class Next Generation Network (NGN) capable of delivering converged Information, Communication and Technology (ICT) services to domestic and African customers’ (Telkom profits down, MyBroadband, 19 November 2007).

In other words, it is safe to assume that Telkom’s efforts to combat increased competition have led to the drop in headline earnings.

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