Telkom reports 8.4% growth, riding on mobile services and data growth

South Africa's telecommunications giant, Telkom, on Monday reported a commendable 8.4% increase in earnings for the third quarter ending December 31, a performance propelled by cost-cutting and a boost in mobile service revenue.

Telkom's share price increased 4.4% to R58.31 on Monday morning, a price that had appreciated from R35.68 a year ago. Mobile services exhibited solid growth with a 7.2% increase, complemented by a good prepaid performance, marking a standout moment in the company’s ongoing evolution.

In a trading update released on Monday, Telkom highlighted a data revenue surge of 9.6%, reaching R686 billion, while year-to-date growth stood at 8.5%, contributing a substantial 60% to the company’s total revenue.

Group CEO Serame Taukobong attributed this growth trajectory to the successful execution of Telkom’s data-led strategy, which he said, showcased the competitive advantage offered by the OneTelkom approach.

Mobile data revenue saw an impressive 12.9% growth during the quarter, backed by a substantial 29.3% increase in mobile data subscribers, which now number 19.3 million, representing 76.5% of the total subscriber base.

This rise in subscribers has sparked a surge in mobile data traffic, which climbed by 20.4%. Pre-paid subscriber numbers also rose by 5.8%, reaching 22.2 million.

Openserve, Telkom’s wholesale network division, reported a 2.2% uptick in overall revenue, attributed to continuous fibre monetisation. The company’s EBITDA (earnings before interest, tax, depreciation, and amortisation) grew by 8.4% to R3.24 billion, with the EBITDA margin expanding to 29.1% due to cost optimisation initiatives.

BCX, Telkom’s IT services division, saw revenue decline by 9.3% in the quarter as tough market conditions impacted performance. However, strong growth was recorded in cybersecurity services, with an 18.4% increase due to a heightened focus on risk and resilience among clients.

The report also provided insight into Telkom’s strategic capital investments. Capital expenditure for the quarter came to R4.17bn, with a focus on expanding and modernising network capacity.

Mobile broadband network enhancements including 150 new sites, while Openserve invested R557m for fibre expansions, enabling connections for over 30 000 homes in just the third quarter.

“We remain committed to sustaining our momentum with cost optimisation efforts and prudent capital investments, particularly in mobile and fibre,” asserted Taukobong. The company is determined to extend its reach into non-metro regions, leveraging tailored service plans to capture additional market share.

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