Telkom SA SOC Ltd. has received a major vote of confidence after S&P Global Ratings upgraded the company’s long-term foreign and local currency issuer credit ratings from ‘BB’ to ‘BB+’, with a Positive outlook. The upgrade, announced on November 24, 2025, strengthens Telkom’s standing in South Africa’s telecommunications and infrastructure sector at a time when economic sentiment is gradually improving.
The rating change follows the uplift of South Africa’s sovereign credit rating on November 14, 2025—an important factor, given Telkom’s status as a Government Related Entity (GRE). The close relationship between the telecom operator and the state means improvements in the government’s fiscal position materially influence Telkom’s credit quality.
A Stronger Position Backed by Improved Financial Health
While the sovereign upgrade set the stage, Telkom’s own financial performance played a decisive role.
S&P affirmed Telkom’s Stand-Alone Credit Profile (SACP) at ‘bbb-’, noting its successful performance during the agency’s liquidity stress test. The company’s strengthened balance sheet, driven by disciplined debt reduction, has created a more resilient financial structure.
A major milestone was Telkom’s sale of its masts and towers business, Swiftnet, in March 2025.
Proceeds from the transaction were largely channeled into debt repayment, reducing S&P-adjusted debt to EBITDA from 2.0x in FY2024 to 0.9x in FY2025—one of the strongest leverage profiles in South Africa’s telecom sector.
Operational Strategy Continues to Deliver
Telkom’s operational turnaround, centered on a data-led strategy and cost optimisation, continues to yield measurable improvements. S&P noted the company’s:
- Improving margin profile, supported by efficiency initiatives
- Conservative credit metrics, expected to remain intact
- Sustainably low leverage, projected between 0.8x and 1.0x over the next few fiscal years
These factors reinforce Telkom’s ability to operate with financial stability even amid broader economic uncertainty.
Positive Outlook Signals Room for Further Upside
The Positive outlook reflects S&P’s view that Telkom has the capacity to strengthen its credit profile even further if it continues its deleveraging path, maintains operational discipline, and benefits from an improving macroeconomic environment.
As the company executes its long-term strategy—focused on value creation, improved network efficiencies, and sustainable financial management—Telkom is positioned to maintain its upward momentum in both performance and investor confidence.
