When Serame Taukobong took over the reins at Telkom as CEO in 2021, his appointment was met with a fair amount of scepticism.

The telecom giant, partially state-owned and weighed down by legacy challenges, was seen by some as a company in decline, far removed from dynamic digital players shaping the future.

Unfazed by doubters, Taukobong has quietly guided Telkom’s transformation to set itself apart from flashier rivals in an industry fraught with upheavals. His pragmatic approach has revitalised Telkom’s operations and better positioned it to withstand future challenges.

Reflecting on Taukobong’s leadership style, a quote by respected US banker Hendrith Vanlon Smith Jr, author of The Wealth Reference Guide: An American Classic, is apt for Telkom’s journey. He writes: “Investing requires a substantial amount of effort, skill, and wisdom. However, it shouldn’t be laborious. Look at the trees in the forest, are any of them labouring? Are any of the trees in the forest hustling or grinding? No, the trees in the forest are not labouring, hustling, or grinding. It’s a natural flow, a progressive accumulation.”

Similar to Smith’s sentiments, Taukobong’s approach to leadership focuses on Telkom’s vision, which he executes with steady determination. This sense of strategic calm is perhaps best described by the meaning of Taukobong’s name. Translated from Setswana, Taukobong means “a lion in the blanket”. The image of a lion at rest, bringing peace and security to the jungle, is symbolic of Taukobong’s understated yet powerful influence on Telkom.

While South Africa’s telecom sector has generally seen turbulent shakeups, Telkom has resisted such chaos. The recent failure of Vodacom’s deal with Maziv, MTN’s persistent challenges and Cell C’s unending turnaround contrast sharply with Telkom’s steady progress under Taukobong.

Since successfully fending off a takeover attempt led by former CEO Sipho Maseko, Telkom has crafted and executed a clear, data-focused strategy, maximising the strength of its extensive infrastructure to redefine itself as a dynamic, integrated telco.

This data-driven shift hasn’t gone unnoticed by investors. A recent analysis from Investec upgraded Telkom’s status to a “buy” rating, raising its target price from R26 to R31. Investec’s enthusiasm is driven by Telkom’s recent performance and its forward-looking strategy. The firm anticipates a 20% improvement in Telkom’s free cash flow for 2025 and an impressive 8.9% compound annual growth rate for operational headline earnings over the next three years.

With a price-to-earnings ratio of 8.2x and an Enterprise Value/EBITDA of 2.5x, Telkom’s valuation metrics reveal strong upside potential compared to other emerging market peers like Telecom Egypt, Maroc Telecom and America Movil.

These gains didn’t materialise overnight, but were the results of a disciplined strategy that Taukobong presented to the market last year. His threefold approach focuses on short-term cash generation through asset sales, mid-term optimisation of core assets, and a long-term expansion into new, high-growth areas.

I believe this strategy is proving effective, not only in terms of cash flow but in reinforcing Telkom’s foundation as a robust, forward-looking digital company.

Taukobong’s approach has manifested in decisive actions, including a R6.75bn sale of Swiftnet to Actis and Royal Bafokeng Holdings, awaiting final regulatory approval. Beyond freeing up cash, this deal aligns Telkom’s portfolio with its goal of leveraging core assets to drive South Africa’s digital future.

Simultaneously, Telkom’s property divestment strategy generated an additional R617m, which will enable the company to invest in areas of future growth without compromising its core focus. Furthermore, Telkom’s strength lies in its vast infrastructure assets, especially its fibre network operator, Openserve, which outpaces competitors with an impressive 170,000km of reach.