Siyabonga Cwele, the Minister of telecommunications and postal services
Siyabonga Cwele, the Minister of telecommunications and postal services (Photo Credit: department of telecommunications)

South Africa’s Telkom on Monday posted a strong set financial results for the year to end March 2017, prompting the Minister of Telecommunications and Postal Services Siyabonga Cwele to gloat about the government decision not to sell its shareholding in the telco.

On Monday, Telkom, South Africa’s biggest fixed-line telephone group, on Monday posted a 12.4% rise in headline earnings per share (HEPS) to 731.4 cents per share for the year to end March 2017, bolstered by the growth of its mobile phone unit. HEPS is South Africa’s main profit gauge.

“These strong results underscore the correctness of Government’s decision, working with other shareholders, to invest in turning around the company instead of selling it. Since the Cabinet decision of June 2012, shareholders reconstituted the board, which appointed a new management team. These changes have seen the company’s share price moving from a low of R12.50 to the recent R77.64. We encourage State Owned Companies that are in trouble to learn from Telkom how it achieved its turnaround,” says Minister Cwele.

In 2012, the state blocked a fairly advanced transaction to sell 20 percent of Telkom to Korea’s KT Corporation because it regarded Telkom as a strategic asset.

Cwele says it is encouraging that the company has been able to achieve such a performance in a tough global economic environment.

He added that the performance of Telkom also suggests the South African society is increasingly embracing the use of Information and Communication and Technologies in their daily activities. He notes that this is a key building block as the country prepares for the Fourth Industrial Revolution.

“It is crucial that we make the cost of data and communication to be more affordable to ensure that more people meaningfully participate in a shared economic growth. We call on all operators to look at ways in which costs can be brought down,” said Cwele.

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