Telkom has posted a strong first-quarter performance, recording a 6.5% increase in core profit as demand for faster internet and next-generation network (NGN) services continues to climb.
For the three months ending 30 June, the South African telecoms provider reported earnings before interest, tax, depreciation and amortisation (EBITDA) of R2.8 billion ($155.6 million), with group revenue edging up 1.1% to R10.82 billion.
The growth was underpinned by a 7.8% rise in mobile service revenue and an 11.3% increase in fibre data revenue from its Openserve unit.
Mobile data subscribers rose 27.5% year-on-year to 17.2 million, while the number of homes connected to fibre jumped 17.5%. Telkom has now passed 1.4 million homes with fibre, connecting 723,337 of them, achieving a 51.1% connectivity rate, which it describes as a major milestone in South Africa’s broadband rollout.
The company’s shift away from copper-based infrastructure has been highly key to its recent momentum. NGN offerings such as fibre and LTE now make up 94% of Openserve’s wholesale channels, with NGN revenue rising 7% year-on-year.
The migration has cut maintenance costs, boosted speeds, and strengthened Telkom’s position against major rivals MTN and Vodacom.
Data remains at the heart of the company’s strategy, accounting for 60% of total group revenue. Fibre-related services contribute 86% of Openserve’s operating income.
Despite this, Telkom’s IT arm, BCX, faced headwinds, with revenue falling 8.3% and EBITDA dropping 25.3%. In response, the company has refocused BCX on higher-margin, recurring IT and fibre-led services and deployed a turnaround team to drive recovery.
On the financial side, Telkom recently settled R4.75 billion in debt following the disposal of its Swiftnet subsidiary. It also returned R500 million to shareholders as a special dividend.
The company says it is aiming for mid-single-digit growth in the medium term, supported by sustained mobile and fibre momentum.