The South African telecommunications giant Telkom has disclosed its financial results for the quarter that concluded on June 30, 2024. The company reported a revenue increase of 3.9%, reaching R10.9 billion (equivalent to $587.2 million). Additionally, there was a notable 14.6% growth in the number of mobile subscribers, with the total count exceeding 21 million.
The 3.9% uplift in group revenue to R10.9 billion was primarily driven by the heightened demand for Telkom’s next-generation network (NGN) services. The growth in NGN was spearheaded by a 9.5% surge in mobile service revenue, a 7.1% climb in fixed data NGN revenue, and a significant 10.3% increase in information technology revenue.
Serame Taukobong, the Group Chief Executive Officer, expressed satisfaction with the company’s performance, stating, “Telkom had a good start to the financial year with a pleasing performance on the top line benefiting from our data-led strategy and compelling value propositions.”
He further elaborated, “Our next-generation revenue streams continued their positive momentum and grew by R576 million, an increase of 7.0%. NGN revenues now comprise 80.7% of Group revenue.”
The group’s growth has been attributed to its consistent delivery of innovative and value-oriented services that have significantly increased data usage among its customers.
A critical component of Telkom’s robust performance was the 14.6% rise in its mobile subscriber base, which now stands at 21.2 million. The company highlighted that its focus on a data-centric business model, including the expansion of its mobile and fibre offerings, has been instrumental in driving this success.
Telkom’s mobile division experienced a surge in revenue, with external mobile service revenue climbing by 9.5% to reach R4.9 billion (approximately $268.99 million). The total external revenue of the group also saw an increase, rising by 5.3% to R5.9 billion ($308.9 million).
The demand for data services remained robust, as evidenced by a 25.8% increase in mobile data traffic and a 33.0% rise in fixed data traffic compared to the previous year. Additionally, Telkom reported substantial growth in its ‘beyond connectivity’ offerings, with revenues hitting R407.5 million. This growth was largely fueled by the popularity of the airtime advance product, which saw a 32.3% year-on-year increase and now represents 32.9% of the total recharge value.
Despite the growth in next-generation network (NGN) services, Telkom observed a 2.4% year-on-year decline in overall revenue, which amounted to R3 056 million. This downturn was mainly due to a significant 28.4% (R188 million) decrease in voice and legacy service revenues.
In a strategic move earlier in the year, Telkom divested its Swiftnet masts and towers business for R6.75 billion ($355.4 million) in March 2024. This sale is indicative of Telkom’s strategy to strengthen its financial standing by reducing debt and improving liquidity.
Furthermore, on August 1, 2024, the Competition Commission (CompCom) of South Africa announced its approval of the acquisition of Swiftnet by TowerCo. The CompCom concluded that the transaction is unlikely to hinder competition within the market, thereby greenlighting the deal.
