Ahead of Telkom’s recent results announcement, I decided to revisit the annual report from 2003, the year the company listed on the Johannesburg Stock Exchange. It was like opening a time capsule.
Fixed line revenue contributed 78% of the total, mobile data sales weren’t even reported (the launch of the iPhone was still four years away), 179,000 payphones remained in use around the country, and internet customers totalled just under 99,000 as Telkom reported strong growth in ADSL and ISDN, technologies most of us have forgotten or never known.
Twenty-two years later, it’s as if we’re living on a different planet. Fewer than half a million fixed phone lines remain, data sales are responsible for well over half of revenue, nearly 16 million mobile and fixed subscribers use Telkom data, and our fibre passes almost 1.4 million homes.
It’s true that these fundamental shifts have been driven by technological upheavals. Basic cellphones gave way to smartphones and mobile internet use now exceeds desktop use globally. Social media, starting with Facebook in 2004, revolutionised communication and information consumption. And cloud computing changed the way we access software, store data and consume entertainment.
But it’s the way Telkom has responded that has enabled it to make the difficult transition from telephone company to engine of the digital economy, in the process building a wave of momentum that will allow it to grow and thrive in a complex operating environment.
Particularly in the past three years, the company’s relentless focus on data, its construction of South Africa’s digital backbone, and its unified OneTelkom approach to delivering integrated telecommunications services are cementing the company’s transformation.
Telkom’s exceptional financial results for the year ending 31 March 2025 (FY2025) are the proof of the pudding:
- Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) were up 25.1% to R11.79 billion and free cash flow was up 543% to R2.73 billion, demonstrating stronger cash generation.
- The net debt to EBITDA ratio, which indicates the company’s leverage and ability to service its debt obligations, was reduced to 0.6x, indicating good liquidity and financial flexibility.
- Openserve’s EBITDA margin of 34,2% points to efficient cost management and strong pricing power.
- Most compellingly, the reinstatement of a dividend after a five-year gap is much more than a reward for shareholders; it is a signal that the progress Telkom is making is not only impressive but sustainable.
Unrivalled infrastructure
Telkom’s growth momentum is coming from data, yes, but its ability to transport, store, process and host that data is driven by its unrivalled infrastructure. Eleven years since fibre to the home was first laid in South Africa, Openserve’s network now extends more than 180,000 kilometres and connects nearly 700,000 homes.
More than half of householders with access to Openserve fibre have elected to use it, a world-class performance that eclipses South African competitors. Telkom’s fixed broadband infrastructure saw a 26.4% year-on-year increase in traffic in FY2025. The 2,915 petabytes of data it handled is enough to watch about 39,000 years’ worth of high-definition video.
Telkom’s mobile network continues to grow and improve, too. More cellphone towers now have fibre backhaul, supporting greater data traffic, and we extended network coverage and reduced congestion. Our LTE coverage now reaches 83% of South Africans and mobile data use was up 24.1%.
Our core network availability was an outstanding 99.99% and our interactive net promoter score, which measures customer satisfaction and loyalty based on interactions such as customer service calls, technical support and service installation, reached 72.3 (50 and above is regarded as exceptional).
Infrastructure at Telkom also includes 10 data centres, including three at Tier 4 (the highest level, guaranteeing 99.99% uptime) – the largest footprint in the country. The remainder are at Tier III (99.98% uptime), as are the company’s 600 aggregation sites (network points that collect and consolidate data traffic from multiple sources before routing it to larger data centres or core networks) and our BCX subsidiary’s two Africa Local Public Cloud availability zones in Johannesburg and one in Mozambique.
Capital expenditure in FY2025 was R5.8 billion, 13.2% of revenue, and we are committed to sustaining capex in the 12–15% range, prioritising strategic investments in our infrastructure, expanding fibre and 4G/5G coverage to underserved areas, and enhancing urban network performance.
The infrastructure foundation Telkom has built positions South Africa at an inflection point for digital economic transformation. Small businesses can access cloud services with the same reliability as multinational corporations, remote workers can participate fully in the global economy, and emerging technologies such as Internet of Things and artificial intelligence have the network they require.
Working as OneTelkom, our infrastructure investments haven’t just made the company unrecognisable to anyone visiting from 2003 – they have built a resilient digital backbone for South Africa. Our full-year results demonstrate that the competent execution of our data-led strategy is meeting or exceeding expectations. Challenges remain but we now have a wave of momentum for Telkom – and South Africa – to thrive in the digital future.
- Beauty Apleni, CEO Openserve
