Wrap Text
Telkom SA SOC Limited
(Incorporated in the Republic of South Africa)
Registration number 1991/005476/30
JSE share code: TKG
JSE bond code: BITEL
ISIN: ZAE000044897
("Telkom" or the "Group")
Trading update for the first quarter ended 30 June 2025
TELKOM CONTINUES POSITIVE MOMENTUM WITH A GOOD START TO FY2026
Group highlights for Continuing Operations1
' Group revenue up 1.1% to R10 817 million
o Group data revenue growth of 7.1%
o Telkom Consumer's mobile service revenue growth of 7.8%
o Openserve's fibre data revenue up 11.3%
' Group EBITDA up 6.5% to R2 798 million
o Ongoing structural cost improvements
o Group EBITDA margin up 1.4 percentage points (ppts) to 25.9%
' Strong operational drivers ' data-led strategy in action
o Mobile data subscribers up 27.5% to 17.2 million
o Homes connected with fibre up 17.5%, with 51.1% connectivity rate
' Positive outlook ' continued growth and profitability improvement expected from disciplined operational
excellence
Notes:
1. Financial measures presented are for continuing operations for the quarter ended 30 June 2025 ("Q1 FY2026") and exclude the masts
& towers business disposed in FY2025. Prior period comparative figures for statutory reporting include masts & towers.
2. All numbers and growth rates quoted are year-on-year ("y-o-y") and refer to Q1 FY2026 compared to the quarter ended 30 June 2024
("Q1 FY2025"), unless stated otherwise.
3. The information contained in this trading update has not been reviewed or reported on by Telkom's external auditor.
Group Chief Executive Officer ' Serame Taukobong commented:
We are pleased to report solid results for the first quarter, building on last year's strong results. Our data-led strategy
continues to be the competitive advantage enabling us to sustain our momentum into FY2026 and the increased
contribution by mobile data and fibre-based services to total revenue is consistent with the assumptions supporting
our medium-term objectives.
Our ongoing focus on operational excellence across our business units as well as the OneTelkom way of winning
continued to drive sustained performance, and we remain focused on delivering results as we build the backbone of
South Africa's digital future. We are optimising selling channels, continuously improving customer experience on our
networks and providing customer-centric value with affordable and flexible offerings to seamlessly connect customers
as we digitally transform South Africa. This resulted in improved profitability for the Group with EBITDA growing by
a solid 6.5%. I am confident this momentum will continue throughout FY2026.
Excellent Telkom results were disappointingly affected by the BCX performance, with BCX revenue declining by
8.3% while its annuity-based revenue remained flat. Aligned with our focus on delivering results, a specialised team
is in place to continue with its work to effect a faster BCX turnaround.
GROWTH POWERED BY CONTINUED DATA REVENUE ACCELERATION AND HIGHER PROFITABILITY
FROM OPERATIONAL EFFICIENCIES
Group financial information for the quarter ended: Y-o-Y %
R million 30 June 2025 30 June 2024 change
Group revenue 10 817 10 703 1.1%
Group data revenue 6 361 5 938 7.1%
Group EBITDA 2 798 2 627 6.5%
Group EBITDA margin 25.9% 24.5% 1.4 ppts
The continued effective execution of our data-led strategy, cushioned Group revenue which grew by 1.1% y-o-y. As
a result:
' Group data revenue grew by 7.1%
' Mobile data revenue increased by 9.6%
' Openserve fibre data revenue grew by 11.3% and
' BCX fibre-related revenue within Converged Communications, improved by 6.8%.
It is the performance of data revenue that gives us confidence that we are heading in the right direction to achieve
our new medium-term guidance of mid-single digit growth.
Overall data revenue contribution as a percentage of total Group revenue advanced in line with our data-led strategy
and now represents almost 60% of Group revenue. Telkom Consumer's mobile service revenue increased by 7.8%,
gaining value market share as it continued outpacing South African market growth rates. Subscribers demonstrated
strong growth, with mobile data users growing an exceptional 27.5% year-on-year and making up 72.1% of total
mobile subscribers of 17.2 million.
Openserve delivered strong results, driven by 11.3% growth in fibre data revenue delivering positive top line growth.
The business unit exceeded its targeted 50% fibre connection rate as it connected an additional 107 907 homes y-
o-y and has now passed 1.4 million homes. BCX continued its focus on higher-margin IT services and saw
operational cost benefits, together with gains from its leaner structure. While growth in fibre data revenue continued,
it partially offset the effect of accelerated voice declines during the quarter.
EBITDA margin expansion enhanced by operational efficiencies
The Group EBITDA was strong, increasing by R171 million as a result of revenue growth and effective cost
optimisation programmes, resulting in EBITDA margin expansion of 1.4 ppts to 25.9%. Cost optimisation initiatives
focused on sustainable costs and optimising operational structures continued to yield results.
The gain on property sales of R127 million also contributed to improved profitability, albeit to a lesser extent relative
to Q1 FY2025 as expected. Excluding property sales, Group EBITDA margin improved by 1.4 ppts to 24.7%, further
highlighting the strength of the underlying operations.
Strong financial position
Our financial position remains strong following the settlement of R4 750 million interest-bearing debt post-year end,
from the R6 618 million proceeds from the Swiftnet disposal concluded in FY2025. R500 million of the Swiftnet
proceeds was returned to shareholders as a special dividend on 14 July 2025. The remainder of proceeds have been
retained to maintain financial flexibility for growth opportunities without compromising our resilience.
R158 million proceeds were received during the quarter from eight of the 30 non-core property portfolio sales in the
prior financial year, further contributing to liquidity. The cash from the remainder of the non-core properties sold for
R121 million, is expected to be received during the year.
Outlook
Looking ahead, Telkom Consumer remains focused on growing service revenue through regional expansion and will
continue investing in competitive value propositions, targeted campaigns, and strategic network expansion.
Openserve's connect-led strategy, clearly evidenced in this quarter's top line growth, can be expected to accelerate
the adoption of fibre-based services, while driving sustainability through ongoing network simplification and energy
transformation programmes. BCX remains focused on expanding the cloud and software portfolios and driving
operational efficiencies, while a specialised team is working to effect a faster turnaround.
We are on track with our data-led journey to deliver sustained performance, actively shaping Telkom to improve
returns while preserving our core strengths. We remain focused on enhancing the Group's growth trajectory and
margin expansion across our portfolio in line with medium-term guidance.
OPERATIONAL REVIEWS
TELKOM CONSUMER
The Mobile business grows service revenue in high-single digit, maintains EBITDA margin
Standalone summary financial information for the Y-o-Y %
quarter ended: R million 30 June 2025 30 June 2024 change
Total Consumer revenue 6 954 6 589 5.5%
Mobile service revenue 5 386 4 996 7.8%
Mobile data revenue 4 193 3 827 9.6%
Mobile EBITDA 1 632 1 543 5.8%
Mobile EBITDA margin 26.4% 26.8% (0.4) ppts
Telkom Consumer operating revenue increase was powered by the continued data-led strategy, emanating from
both the mobile and fibre offerings.
The Mobile business grew total external revenue by 7.2% to R6 148 million, driven by mobile service revenue growth
of 7.8%. The growth was underpinned by our value-focused customer propositions despite an intensely competitive
environment in the first quarter. Our strategic approach of simplifying and evolving our product catalogue resonates
well with customers. Mobile data revenue expansion was due to a continued surge in mobile data subscribers and
data traffic. Telkom's share of acquisitions in the under serviced regions improved by 5.4%, driven by regional
activations and Mo'Town, which is our Customer Value Management initiative for area-specific customer value
propositions.
The total subscriber base grew by 12.3% to 23.8 million, with a blended ARPU of R75. Pre-paid subscribers rose
14.0% to 20.8 million at R58 ARPU. The decline in the pre-paid ARPU reflects continued growth in lower-ARPU,
higher-volume non-metro regions. The post-paid subscriber base increased marginally by 1.7% to 3.0 million, with
ARPU improving to R187, which shows our ability to preserve high-value customers and long-term revenue visibility.
Mobile data subscribers expanded by 27.5% to 17.2 million and now comprises 72.1% of the total subscriber base.
This led to mobile data traffic growing by 15.9% to 480 petabytes. On the fibre side, we experienced a 6.6% increase
in the subscriber base, supported by a 6.3% ARPU growth resulting in revenue from fibre growing by 11.6%.
The EBITDA of the Consumer business grew by 18.5% to R1 423 million, leading to EBITDA margin expanding by
2.3 ppts to 20.5%. Mobile EBITDA of R1 632 million was attributable to service revenue growth and stabilised roaming
costs, resulting in an EBITDA margin of 26.4%. The credit vetting interventions continued to yield results, as
impairment of receivables were largely flat.
The beyond connectivity services recorded revenue of R459 million, an increase of 12.7%. The airtime lending
product increased by 13.1% and represented 29.0% of pre-paid recharges.
Telkom Consumer capital expenditure of R473 million was invested primarily for capacity expansion and 56 sites
were added during the quarter. Furthermore, 332 lithium-ion batteries were installed at high revenue sites.
OPENSERVE
Total revenue records positive growth, as fibre revenue growth continues
Standalone summary financial information for the Y-o-Y %
quarter ended: R million 30 June 2025 30 June 2024 change
Revenue 3 142 3 056 2.8%
Fibre data revenue 2 508 2 254 11.3%
EBITDA 1 032 1 023 0.9%
EBITDA margin 32.8% 33.5% (0.7) ppts
Openserve's overall revenue increased by 2.8% supported by fibre data revenue, which grew by 11.3% (or R254
million). Fibre-related revenue now contributes 86% of our operating revenue. External revenue grew by 5.9% to R1
248 million driven by 9.3% or R88 million increase in fibre-based products and services.
Homes passed by Openserve grew by 12.6% to 1 414 927, while homes connected increased by 17.5% to 723 337,
resulting in the industry-leading connectivity rate improving to 51.1%. During the quarter 35 997 homes were passed
and 28 707 connected, as we continue to invest in the last-mile. We invested R557 million primarily to expand and
modernise the network and this supported uptime of 99.90%, 99.88%, and 100.00% across access, transport and
core network, respectively. Our world-class Interaction Net Promoter Score (iNPS), improved to 80.1 (Q1 FY2025:
72.3).
The optimisation of costs through network simplification and energy transformation continued, resulting in a total of
1 332 sites now being equipped with lithium-ion batteries. Diesel spend for the quarter resulted from load reduction
and municipal power outages and amounted to R19 million, a decline of R4 million from Q1 FY2025. As a result,
EBITDA increased by 0.9%, however, EBITDA margin contracted marginally by 0.7 ppts year-on-year.
BCX
BCX performance reflects transition to IT services and fibre solutions
Standalone summary financial information for the Y-o-Y %
quarter ended: R million 30 June 2025 30 June 2024 change
Revenue 2 910 3 175 (8.3%)
- Information technology revenue 1 690 1 790 (5.6%)
- Converged Communications revenue 1 220 1 385 (11.9%)
EBITDA 189 253 (25.3%)
EBITDA margin 6.5% 8.0% (1.5) ppts
The performance of BCX disappointed. The deliberate moderation of hardware and software sales, together with the
managed migration of legacy services to fibre solutions, saw revenue decline by 8.3%. Even excluding these
deliberate portfolio decisions, annuity-based revenue remained flat.
We are focused on our transformation to higher-margin, recurring IT and fibre-led services. Fibre-related data
revenue grew 6.8% to 89% of data services, while voice remained stable. This helped to partially mitigate lower
revenue within the Converged Communications business, owing to the deliberate migration. In the IT business, the
reduction of exposure in hardware and software sales, which declined 9.8% or R113 million, is aligned with our shift
to scalable, service-based revenue. Despite IT services revenue decreasing by 3.1%, reflecting resilient client
demand in a tough environment, we are gaining share in high-value segments. Traditional and Network Cybersecurity
grew 32%, Municipal Solutions 7% and Internet of Things by 6%.
The EBITDA decrease and margin compression to 6.5%, were primarily driven by the revenue decline. The margin
compression was partly offset by cost efficiencies from the FY2025 cost transformation programme that resulted in
operational expenditure reducing by 11.9%. This was driven by a 21.8% reduction in employee costs due to
restructuring and a R48 million contraction in impairment of receivables, as the continued proactive management of
receivables continued. We anticipate further savings from these initiatives as the financial year progresses.
We are actively embedding technology enhancements across our service delivery and operations to enhance client
experience and drive operational efficiency.
TELKOM MANAGEMENT TO HOST MARKET UPDATE CONFERENCE CALL
Management will host a call for the investment community on Tuesday, 05 August 2025 at 16h00 South African
Standard Time (UTC+2) to discuss the trading update and conduct a Q&A session. Dial-in details will be made
available on the Group website https://group.telkom.co.za/ir/overview.html.
Centurion
05 August 2025
Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Investor and Media contacts:
Investor Relations Media
Nondyebo Mqulwana Batlile Phaladi
telkomir@telkom.co.za media@telkom.co.za
SUPPLEMENTARY FINANCIAL INFORMATION
The financial information in the table below has not been reviewed or reported on by Telkom's external auditor.
(R'm) Q1 FY2026 Q4 FY2025 Q3 FY2025 Q2 FY2025 Q1 FY2025
June March December September June
Continuing operations 2025 2025 2024 2024 2024
Group revenue 10 817 11 503 10 995 10 679 10 703
Group data revenue 6 361 6 353 6 265 6 172 5 938
Other 4 456 5 150 4 730 4 507 4 765
Group EBITDA ' reported 2 798 3 200 2 986 2 201 2 627
Group EBITDA ' adjusted 2 798 3 200 2 986 2 979 2 627
Group EBITDA margin ' reported (%) 25.9% 30.2% 27.2% 20.6% 24.5%
Group EBITDA margin ' adjusted (%) 25.9% 30.2% 27.2% 27.9% 24.5%
Group capex 1 102 2 180 1 096 912 1 639
Consumer 473 1 038 455 228 1 076
BCX 61 214 41 73 64
Openserve 557 883 578 586 488
Gyro 5 1 1 - 2
Corporate 6 44 21 25 9
Revenue breakdown
Mobile 6 148 6 408 6 346 5 957 5 737
Mobile voice and subscriptions 1 036 1 048 1 157 1 073 1 044
Mobile interconnection 157 166 155 132 125
Mobile data 4 193 4 130 4 089 4 019 3 827
Handset and device sales 668 946 877 659 668
Significant financing component 92 84 68 74 73
Other 2 34 - - -
Fixed 3 100 3 402 3 219 3 217 3 249
Voice 504 551 584 641 664
Interconnection 51 49 59 55 57
Data 2 168 2 223 2 176 2 153 2 111
Fibre-related services 2 014 2 201 1 905 1 863 1 791
Other data services 154 22 271 290 320
8
Handset and device sales 274 453 325 259 323
Sundry revenue 103 126 75 109 94
Information technology 1 397 1 532 1 249 1 356 1 572
Information technology service
869 995 976 987 926
revenue
IT hardware and software 514 513 263 355 633
Interest revenue 14 24 10 14 13
Other 172 161 181 149 145
Digital media sales 27 33 37 41 34
Insurance revenue 78 75 73 72 72
Lease revenue 67 28 71 36 39
Gyro management fee 25
Total 10 817 11 503 10 995 10 679 10 703
Business unit stand-alone information
Q1 FY2026 Q4 FY2025 Q3 FY2025 Q2 FY2025 Q1 FY2025
(R'm) June March December September June
2025 2025 2024 2024 2024
Revenue
Telkom Consumer 6 954 7 256 7 152 6 807 6 589
BCX 2 910 3 298 2 913 2 960 3 175
Openserve 3 142 3 081 3 107 3 105 3 056
EBITDA
Telkom Consumer 1 423 1 474 1 488 1 404 1 201
Telkom Mobile 1 632 1 606 1 755 1 660 1 543
BCX 189 385 438 300 253
Openserve 1 032 852 1 069 1 061 1 023
EBITDA margin (%)
Telkom Consumer 20.5% 20.3% 20.8% 20.6% 18.2%
BCX 6.5% 11.7% 15.0% 10.1% 8.0%
Openserve 32.8% 27.7% 34.4% 34.2% 33.5%
Mobile service revenue (external) 5 386 5 344 5 401 5 224 4 996
Mobile EBITDA margin 26.4% 24.9% 27.6% 27.7% 26.8%
Quarterly operational information
Q1 FY2026 Q4 FY2025 Q3 FY2025 Q2 FY2025 Q1 FY2025
June March December September June
2025 2025 2024 2024 2024
Mobile subscribers
Active mobile subscribers 23 818 683 23 175 835 23 999 182 22 784 590 21 213 647
- Pre-paid 20 795 811 20 193 260 20 985 177 19 777 721 18 242 602
- Post-paid 3 022 872 2 982 575 3 014 005 3 006 869 2 971 045
ARPU blended (rand) 75.40 77.98 78.79 79.97 80.53
ARPU pre-paid (rand) 58.49 60.08 60.75 61.46 62.00
ARPU post-paid (rand) 187.13 186.15 185.35 185.62 183.10
Mobile data subscribers 17 165 079 15 226 291 14 946 694 14 582 031 13 466 730
Fixed subscribers
Fixed broadband lines 577 318 565 322 559 392 553 312 553 369
Fibre 552 012 535 552 523 299 509 617 499 100
xDSL 25 306 29 770 36 093 43 695 54 269
Network population coverage
Homes passed 1 414 927 1 378 930 1 340 565 1 290 462 1 256 603
Homes connected 723 337 694 630 667 465 640 730 615 430
Enterprise business services 46 794 44 663 44 041 44 041 42 915
Carrier services 21 579 21 149 20 637 19 912 19 927
Fibre connectivity rate (%) 51.1% 50.4% 49.8% 49.7% 49.0%
Mobile sites integrated 7 965 7 909 7 863 7 814 7 778
Traffic
Fixed broadband (petabytes) 836 769 757 708 681
Mobile broadband (petabytes) 480 457 452 436 414
Total fixed-line traffic (millions
of minutes) 817 887 973 986 955
Forward looking statements
Certain financial information presented in this trading update announcement may constitute forward
looking statements.
All statements, other than statements of historical facts, including, among others, statements regarding
our strategy; future financial position and plans; objectives; capital expenditures ("capex"); projected costs
and anticipated cost savings and financing plans; as well as projected levels of growth in the
communications market, are forward-looking statements. Forward-looking statements can generally be
identified by terminology such as "may", "will", "should", "expect", "envisage", "intend", "plan", "project",
"estimate", "anticipate", "believe", "hope", "can", "is designed to" or similar phrases. However, the absence
of such words does not necessarily mean a statement is not forward looking.
Forward-looking statements involve several known and unknown risks, uncertainties and other factors that
could cause our actual results and outcomes to be materially different from historical results or from any
future results expressed or implied by such forward-looking statements. Factors that could cause our
actual results or outcomes to differ materially from our expectations include, but are not limited to, those
risks identified in Telkom's most recent integrated report which is available at
https://group.telkom.co.za/ir/overview.html.
Telkom cautions readers not to place undue reliance on these forward-looking statements. All written and
verbal forward-looking statements attributable to Telkom, or persons acting on Telkom's behalf, are
qualified in their entirety by these cautionary statements. Moreover, unless we are required by law to
update these statements, we will not necessarily update any of these statements after the date of this
document, so that they conform either to the actual results or to changes in our expectations.
11
Date: 05-08-2025 08:00:00
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