Telkom shares rose to their highest level in almost two years on Monday as the telecom operator reported strong results for the third quarter.
The surge comes amid growing demand for data-led services as Telkom experiences improved operational efficiencies across its businesses.
Group revenue for the quarter ended December was up 0.9% at R10.995bn, while earnings before interest, tax, depreciation and amortisation was 28% higher at R2.986bn.
Group revenue increased in line with medium-term guidance, primarily driven by the ongoing demand for data propositions, Telkom said in a statement on Monday.
Key contributors were higher prepaid recharges, mobile data revenue growth of 10.8% and ongoing migrations to fibre-related services with fixed-data revenue growing by 4.7% and information technology services revenue increasing by 3.2%.
Overall mobile service revenue growth at 9.6% continued to gain value share, outperforming SA mobile market growth rates, Telkom said.
For the nine months to date, group revenue advanced by 1.6% to R32.377bn.
The mobile business focused on acquiring customers and managing device and roaming costs while expanding mobile network coverage to migrate traffic onto its network.
Mobile subscribers reached a record 24-million, up 21.6%. Mobile data users grew by 17.3% and now comprise 62.3% of total mobile subscribers.
These initiatives led to operational efficiency gains and higher profitability.
Market cheer
Market players cheered the earnings report, Telkom shares soaring to close 7.86% stronger at R36.37, levels last seen in March 2023. Sector peers Vodacom and MTN, however, did not fare as well, down 1.07% and 0.94%, respectively.
“Openserve, the fixed connectivity business, achieved improved operating margin for the quarter, reflecting an optimised footprint as they provided the most reliable fixed network throughout the country.
“Our ICT business, BCX, executed well on streamlining its operating structures and improved its revenue mix by growing IT services,” Telkom said.
An additional 100,115 homes were connected with fibre, up by 17.6%. The group also noted continued substantial growth in data consumption with mobile and fixed traffic growing by 22.2% and 23.7% respectively year on year.
The group is in the final stages of closing the disposal of Swiftnet, having obtained all the required regulatory approvals in December. The proceeds from property disposals provided additional liquidity to the group, it said.
In April last year, Telkom announced the planned sale of its masts and towers business, housed in Swiftnet, for R6.75bn to a consortium consisting of an infrastructure fund managed by a subsidiary of Actis and an infrastructure vehicle 100% owned by Royal Bafokeng Holdings.
We are pleased to report strong results for the third quarter, reaffirming our position as the backbone of SA’s digital future.
— CEO Serame Taukobong
The group has the approval of the Independent Communications Authority of SA and the Competition Commission for the deal, which is on track to close by the end of 2025.
Swiftnet owns and operates about 3,900 commercially viable masts and towers in SA.
“We have continued to advance our business to focus on our core strength — data connectivity. Optimising our cost structures has embedded a cost-conscious culture that will continue into the next financial year,” Telkom said.
Telkom, partly owned by the state, last year fended off a takeover bid by a consortium led by its former CEO, Themba Maseko.
Group CEO Serame Taukobong set a bullish tone for the year ahead.
“We are pleased to report strong results for the third quarter, reaffirming our position as the backbone of SA’s digital future. Our data-led strategy continued to deliver impressive performance across key metrics, underscoring our competitive advantage in our diverse businesses working together to realise these results,” he said.
“With strong momentum across our business units, we remain confident in achieving our medium-term objectives as we continue to invest in our infrastructure, network and digital services delivering profitable growth.
“These results provide clear evidence that we are on track... we remain confident in our strategic direction and our ability to create sustainable value for our stakeholders.”
Taukobong joined Telkom in 2018 as CEO of consumer business, which oversees the group’s mobile business.
Before that, he held numerous leadership roles within the MTN group, including CEO of MTN Ghana, chief marketing officer of MTN SA, and COO of MTN Uganda.
Update: February 10 2025
This story has been updated with more information.
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