Telkom has recorded 10 consecutive quarters of service revenue growth at its mobile business and says it is outpacing its competitors.
The company, releasing its results for the year to end-March this week, said its mobile-data-led strategy was paying off as consumers looked for affordable internet packages.
The mobile data subscriber base expanded 19.5% year on year to 15.2-million and now comprises 65.7% of the total mobile subscriber base.
“This was fuelled by surging demand for seamless connectivity and value-optimised plans that resonate with our target market,” said CEO Serame Taukobong.
Mobile data revenue increased 12.3% to R16bn and data traffic rose 24.1% to 1,759PB (petabytes), Telkom said. Group data revenue was R24.7bn, up 9.4%. Data revenue now represents 56.4% of group revenue, which rose 3.3% to R43.9bn.
Taukobong said mobile service revenue “continued to outpace reported South African mobile market growth rates, and subscriber numbers demonstrated strong growth”.
Lunga Siyo, CEO of Telkom’s consumer and small business unit, said the company had been growing at an average of 6%, double the industry average.
“In the telco space service revenue is key because it’s what you generate from customers monthly,” Siyo said.
“It’s things like contracts, airtime and data that you buy. If that is growing, you’re doing well. So we’ve done that for the past 10 consecutive quarters, so that’s more than two years. The market has been growing at about 3%. We’ve been growing at over six and now recorded 10% growth.”
Telkom’s mobile business grew service revenue 10.2% in financial 2025 to R20.9bn, fuelled by a surge in data revenue.
The total mobile subscriber base rose 13.4% to 23.2-million, primarily driven by strong growth in prepaid subscriptions.
In the postpaid or contract segment, Telkom maintained a stable subscriber base of 3-million with an average revenue per user (Arpu) of R186.
In the prepaid segment, subscriber numbers rose 15.4% to 20.2-million with an Arpu of while R60, down from R65 the previous year. Telkom attributed this drop to the larger proportion of non-metro subscribers, for whom Arpu is usually lower.
It’s not a question of targeting to be cheaper on a gig of data, instead we create value for customers at different price points
— Lunga Siyo, CEO of Telkom’s consumer and small business unit
“We’ve got affordable value propositions in the market,” Siyo said.
“So it’s not a question of targeting to be cheaper on a gig of data, instead we create value for customers at different price points. If others are offering 1GB, I’ll offer 2GB or 2GB-plus for either a better price or the same price.
“So that’s how we create value for customers. That has been a winning ticket for us,” he said.
“We also use machine-learning and AI tools to mine customer data to really understand customer behaviour. We then use that to offer a personalised pricing proposition. We are able to create value that no-one can for that particular customer at that particular time.”
Telkom also operates fibre business Openserve, which has more than 180,000km of fibre and has connected 694,630 homes, an increase of 17.6%.
Headline earnings per share from continuing operations rose 62.3% to 467.5c.
Mike Gresty, fund manager at Anchor Capital, said the results represented “a commendable turnaround, with this management team identifying Telkom’s areas of competitive strength and executing a strategy well to benefit from that. In particular, I continue to be impressed with the inroads it is making in the mobile market in South Africa with its data-led strategy.”
For its financial year ended December 2024, rival MTN South Africa, which has 39.2-million subscribers, reported revenues of R52.5bn with network services revenue at R32.1bn. Last month Vodacom South Africa reported that service revenue for the year to March grew 2.3% to R63bn. At the end of March, Vodacom had 45.9-million subscribers.
Gresty said the investment cases for MTN and Vodacom were strongly driven by the non-South African parts of their business while Telkom was a pure South Africa play.
“Generally though the strong share price recovery for these stocks in 2025 reflects the fact that investors have greater confidence that these companies will be able to translate demand for their services into tangible results for shareholders going forward than has been the case in the past,” he said.
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