Telkom’s Financials Shine, Fixed-Line Subscribers Drop
Telkom has reported improved financial results for 2024, driven by its next-generation services and cost-cutting measures. The company saw a 5.2% rise in normalized earnings before interest, taxes, depreciation, and amortization (EBITDA) to R10 billion, reflecting stronger operational performance and successful cost optimization efforts.
Telkom’s total adjusted headline earnings per share and adjusted basic earnings per share surged by 201.3% and 442.8% to 376 cents and 385.5 cents, respectively. Despite these gains, the company experienced a loss of approximately 184,000 fixed-line subscribers over the past year.
The number of Telkom’s fixed-access lines, encompassing copper voice and broadband packages, dropped by 23.2%, from 793,000 in March 2023 to 609,000 in March 2024. This significant decline, representing nearly a quarter of its fixed-access customer base, highlights the challenges Telkom faces in the fixed-line market. For around two decades, Telkom held a monopoly on fixed copper voice and broadband services. However, the rise of internet-based mobile voice services and fierce competition from fibre network operators (FNOs) have eroded its market dominance.
While the fixed-line losses were notable, growth in fibre services provided some offset. Openserve, Telkom’s wholesale division, saw revenue from next-generation, data-led products and services grow by 7.4%, now comprising 76.4% of its total revenue. As South Africa’s leading wholesale infrastructure connectivity provider and the largest open-access network, Openserve experienced a 16.1% uptick in next-generation broadband connectivity (fibre to the home), while the enterprise and carrier segments grew by 4.8% and 2.5%, respectively.
Telkom Consumer also performed well, increasing external revenue by 2.2% to R26.1 billion. External revenue from mobile operations rose by 4.5% to R22.6 billion, driven by a 6.8% growth in mobile service revenue. In a highly competitive market, Telkom Consumer grew its mobile subscribers by 11.9% to 20.4 million, with mobile broadband subscribers growing by 9.5% to 12.7 million, representing 62.3% of the total mobile base.
BCX, Telkom’s IT services division, maintained gross revenue at R14.2 billion despite operating in a highly competitive market. However, reported revenue eased by 2.3% to R12.9 billion due to an accounting revision for agent versus principal contracts. Gross IT revenue grew by 11.4% to R8.5 billion, driven by new product deals, software contract renewals, clearing prior-year backlogs in integration services, and record cross-border sales.
Gyro, Telkom’s property management arm, shifted its focus to managing the Group’s property portfolio for core operational purposes, optimizing the Telkom property footprint, and improving energy efficiency. The disposal of properties no longer required generated R92 million.
Group CEO, Taukobong, noted that the Group has built a solid foundation to grow as a focused InfraCo, leveraging its mobile and fixed networks alongside its ICT capabilities. This strategy involves efficient investments in mobile and fibre network businesses while expanding ICT capabilities anchored by data centres.
