Leadership reflections on FY2025
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"Our improved performance and strong financial position reflect the success of our data-led strategy. We surpassed market expectations as our strategy delivered excellent results."
"These results were supported by efficiency and customer centricity, strategic infrastructure investments, expanded fibre and 4G/5G coverage, and our flexible, affordable plans tailored to diverse customer segments."
Serame Taukobong
Group Chief Executive Officer
The operating environment underwent key shifts on the domestic and global fronts. Did these impact Telkom's ability to create value?
Domestic and global economic headwinds negatively impacted consumers and businesses in FY2025. This forced South African households to reconsider where to spend their disposable income. Accordingly, we made sure we brought the best value propositions to our customers while remaining competitive.
We experienced a significant shift in South Africa's political landscape as the 2024 national elections resulted in a Government of National Unity (GNU). It remains important for Telkom to maintain a solid relationship with the government as a strategic partner and our largest shareholder. We engaged at national and provincial levels to explore ways in which Telkom can be an enabler for growth and drive digital transformation and inclusion in South Africa.
Telkom continued its growth trajectory despite the uncertain operating context. Revenue increased by 3.3%, supported by our mobile and broadband strategies. We focused on growing revenue from our next-generation technologies as we transition away from traditional fixed‑line revenue.
Mobile and fibre service revenue growth across the Group, along with effective cost efficiency programmes, improved Group adjusted EBITDA by 25.1%.
FCF increased more than sixfold to a positive R2 778 million.
Our net debt to Group adjusted EBITDA ratio improved to 0.6x, driven by higher earnings and debt repayments. The use of proceeds from the Swiftnet transaction to reduce debt post-year-end further improved this ratio.
Group adjusted EBITDA increased by 25.1% to R11 792 million, outpacing revenue growth.
Our EBITDA growth was primarily driven by the cost‑optimisation efforts we implemented across the Group. Our cost transformation programme included initiatives such as managing roaming costs in our mobile business, network simplification by Openserve, and employee restructuring and facilities consolidation by BCX. These savings are structural and longterm, focusing on sustainable costs and optimising operational structures.
Read more about our financial performance in the GCFO's report.
In FY2025, Telkom concluded the disposal of Swiftnet. How will this benefit Telkom, and what were the key milestones in the transaction?
The Swiftnet transaction complements the FCF generated from our underlying operations.
Approximately 72% of the R6.6 billion in cash proceeds will go to servicing our debt. Our net debt to EBITDA ratio was 1.8x when we initiated the sale in FY2023, and is now 0.6x. Lower debt levels and a stronger balance sheet create room for future growth, more innovation, and a sustained competitive edge in a dynamic market.
A portion of the proceeds will be returned to shareholders in the form of a special dividend (R500 million). The rest will serve as a buffer and enable us to explore additional capital investment opportunities. The transaction had no negative impact on our existing operations.
Considering the current macro-economic uncertainties, being able to service our current and future debt places Telkom in a strong liquidity position.
Our stronger, more predictable FCF supports optimised capital allocation, strategic reinvestment in the business, and our dividend policy.
| 2024 | 2025 | |||||
| March The Swiftnet sales agreement was announced, with a consortium comprising an infrastructure fund managed by a subsidiary of Actis and a vehicle owned by Royal Bafokeng Holdings (Pty) Ltd as its broad-based black economic empowerment (B-BBEE) partner. The purchase consideration was R6.6 billion. |
March All key conditions for the sale were met and the effective date for the disposal was 31 January 2025 |
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| May Telkom shareholders unanimously approved the sale. |
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| August The Competition Commission approved the deal and referred it to the Competition Tribunal, which later approved the transaction with conditions. |
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| December The Independent Communications Authority of South Africa (ICASA) approved the sale. |
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Last year, you mentioned the significance of leveraging Telkom's infrastructure assets and entrenching the OneTelkom culture. How did Telkom deliver on its strategy with OneTelkom in mind?
We focused on strengthening the execution of our PIVOT Strategy, including identifying opportunities to utilise our infrastructure assets to drive revenue growth.
This strategy is showing positive results. We saw significant demand for pre-paid data, which is reflected in the growth of our mobile business. We also saw the positive impact of fibre in driving data growth through Openserve and BCX.
We championed crossbusiness unit collaboration through OneTelkom.
In FY2025, Telkom was awarded a significant portion of a contract by the State Information Technology Agency to connect clinics, schools, government offices and police stations nationwide with the latest broadband infrastructure. This would not have been possible without collaboration between BCX and Openserve. Securing this contract aligns with our strategic objectives to offer end‑to‑end converged propositions and become the leading broadband provider in South Africa.
We are also using the OneTelkom approach to improve our network planning and achieve better synergies in the rollout of fibre networks and equipment to mobile base stations. Teams across our business units are working together to retain contracts and provide superior value through innovative product and service bundles for enterprise clients.
The Swiftnet transaction was another success story of OneTelkom. It required collaboration between Openserve and Telkom Consumer, as these entities are also tower tenants and various contracts associated with the towers directly impact them.
We are undergoing a culture transformation process to cement OneTelkom internally. This includes new shared values that support the vision of working as OneTelkom, namely collaboration, customer centricity, agility, accountability and simplicity.
This report highlights Telkom's ESG achievements in ethical leadership, gender diversity, socio-economic impact and emissions reduction. How do these position Telkom for the future?
It is important that we proactively live the principles of good governance and ethical leadership.
Telkom has done significant work prioritising ethical leadership at the Board and Exco levels and across the Group. We are also encouraged by the active use of our whistleblower platforms, which demonstrate our commitment to zero tolerance for unethical behaviour.
Achieving fair gender representation remains a priority. Three years ago, we set the goal for women in leadership positions at 35%. We have since achieved this target, and I believe we should aim for 50% over the next few years. This representation must be reflected across the Telkom ecosystem, from senior leadership to our internship programmes.
We have reduced our Scope 1 and 2 carbon emissions by 32% since FY2022. This is good for the planet and for our business. It affords us greater resilience in a volatile energy landscape. This transition resulted from our network modernisation and shift away from legacy technologies, as well as a concerted team effort driven by Group KPIs.
We are proud of our impact on digital literacy and education through the Telkom Foundation. We also contribute to job creation through our investments in SMMEs. The socio-economic challenges in South Africa are immense, and it is only through addressing inequality and economic growth that we as a business will continue to thrive.
In the coming years, we will deepen our endeavours in all these areas as part of our sustainability strategy.
This year, Telkom implemented its technology and information strategy. How will this help to build a fit-for-purpose technology operating model that will take Telkom into the future?
We have reset our technology strategy to position Telkom as a digital enabler in the fourth industrial revolution era. Following a Group-wide digital strategy review led by the Group Chief Digital Officer, we developed a fit-for-purpose operating model that is agile and aligned with our PIVOT Strategy.
We are already reaping the fruits of the strategy. This includes cost savings through IT spend optimisation and operational efficiency gains via modernised operational and business support system platforms. Digitised channels and the Openserve Technician App have improved the customer experience.
We approach AI with a strong ethical lens – ensuring governance, transparency, data privacy, oversight and protection of our intellectual property.
South Africa is lagging globally in AI adoption. This presents an opportunity for Telkom to position itself as a leading infrastructure company by providing the infrastructure ecosystem required to enable AI adoption.
Our fibre infrastructure, data centres, and ability to connect customers already set us apart from our competitors. Telkom has the building blocks required to meet the AI demands in South Africa and southern Africa.
What are Telkom's priorities for FY2026, and how do they align with the PIVOT and ESG strategies?
Improving financial performance across Telkom remains a priority.
We are confident that the Group will see greater top-line growth in fibre and mobile services as our legacy revenues become less significant.
We will enhance our cost-containment measures and improve operational efficiencies to support our cost-to-revenue ratio.
We are committed to entrenching the OneTelkom culture across the Group. We will foster collaboration and identify operational synergies between our business units. We will continue investing in our people through training and development support and succession planning programmes.
Our growth areas are centred on our dataled strategy for fibre and mobile, and we continue to invest in these areas. We will grow our mobile subscriber base and homes connected with fibre, while providing innovative solutions tailored to deliver value for existing and new customers. We will grow IT services for our enterprise customers through BCX, using fibre data as a base for layering on these services.
We are conscious of our role in preserving the planet for future generations. We will continue to explore environmentally friendly and energy-efficient propositions to reduce carbon emissions.
In FY2026, we will review our PIVOT Strategy and assess its appropriateness for Telkom's future.
Any final words to stakeholders?
Telkom has undergone a significant turnaround in the last 18 months.
I am grateful to our employees for their resilience, hard work and passion during these testing times.
I thank the Board for their continued support and guidance.
I also thank Althon Beukes, who has stepped down as CEO of Openserve. Althon served in this role since 2020 and has been with Telkom for 30 years. We wish him all the best in his future endeavours. He is succeeded by Beauty Apleni, and we look forward to her contributions in this key leadership role.
To all our partners, I look forward to building strategic and long-lasting partnerships that will accelerate South Africa's digital transformation.
Serame Taukobong
Group Chief Executive Officer
