The Public Investment Corporation (PIC) has increased its equity stake in Telkom, effectively restoring the South African government’s majority control over the telecommunications company. This development marks a significant reversal, less than a year after the state relinquished its controlling interest.
In a shareholder notice issued on Thursday, 10 July, Telkom confirmed a change in beneficial ownership following the PIC’s acquisition of additional shares. The PIC, which manages public sector pension funds, now holds 10.25% of Telkom’s ordinary shares on behalf of its clients.
Combined with the 40.51% directly held by the South African government—represented by the Department of Communications and Digital Technologies—the state now commands a 50.76% stake in Telkom, once again giving it a controlling interest.
Although the PIC’s shares are technically held in trust for its beneficiaries, the state-run fund retains proxy voting rights, effectively consolidating government influence over Telkom’s strategic direction.
A Reversal of 2024’s Divestment
This move represents a notable turnaround. In 2024, the government lost its majority stake after the PIC reduced its holdings from 15.89% in March to below 8% by August, bringing the total state-aligned shareholding to just 48%. At the time, this marked the first time in decades that Telkom was no longer majority state-owned.
Despite the change in ownership, Telkom retained its legal designation as Telkom SA SOC Limited, with “SOC” denoting its status as a State-Owned Company.
Costly Buyback Amid Rising Share Price
The PIC’s decision to re-enter Telkom comes at a significantly higher cost. In August 2024, it sold shares when Telkom’s stock was trading at R24. Since then, the company’s share price has more than doubled, reaching R55.18 during Thursday’s trading session—a 60% increase since the start of 2025 alone.
This means the PIC has effectively bought back shares at more than twice the price it sold them for, raising questions about the timing and financial implications of its investment strategy.
Missed Dividends and Performance Gains
Adding to the cost, the PIC also missed out on substantial shareholder returns. Shortly after its 2024 divestment, Telkom reported a dramatic turnaround, posting R7.5 billion in profit for the 2025 financial year. The company resumed dividend payments after a three-year suspension and even declared a special dividend following the R6.5 billion sale of its tower business, Swiftnet.
Telkom had halted dividends in 2020 to conserve cash and invest in spectrum acquisition, only resuming payouts in 2025—just after the PIC had exited.
Strategic Implications
The government’s renewed majority stake could have far-reaching implications for Telkom’s governance, strategic direction, and potential privatization prospects. It also underscores the state’s continued interest in maintaining influence over critical digital infrastructure and telecommunications services in South Africa.
