When Serame Taukobong took over the reins at Telkom as CEO in 2021, his appointment was met with a fair amount of scepticism.
The telecom giant, partially state-owned and weighed down by legacy challenges, was seen by some as a company in decline, far removed from dynamic digital players shaping the future.
Unfazed by doubters, Taukobong has quietly guided Telkom’s transformation to set itself apart from flashier rivals in an industry fraught with upheavals. His pragmatic approach has revitalised Telkom’s operations and better positioned it to withstand future challenges.
Reflecting on Taukobong’s leadership style, a quote by respected US banker Hendrith Vanlon Smith Jr, author of The Wealth Reference Guide: An American Classic, is apt for Telkom’s journey. He writes: “Investing requires a substantial amount of effort, skill, and wisdom. However, it shouldn’t be laborious. Look at the trees in the forest, are any of them labouring? Are any of the trees in the forest hustling or grinding? No, the trees in the forest are not labouring, hustling, or grinding. It’s a natural flow, a progressive accumulation.”
Similar to Smith’s sentiments, Taukobong’s approach to leadership focuses on Telkom’s vision, which he executes with steady determination. This sense of strategic calm is perhaps best described by the meaning of Taukobong’s name. Translated from Setswana, Taukobong means “a lion in the blanket”. The image of a lion at rest, bringing peace and security to the jungle, is symbolic of Taukobong’s understated yet powerful influence on Telkom.
While South Africa’s telecom sector has generally seen turbulent shakeups, Telkom has resisted such chaos. The recent failure of Vodacom’s deal with Maziv, MTN’s persistent challenges and Cell C’s unending turnaround contrast sharply with Telkom’s steady progress under Taukobong.
Since successfully fending off a takeover attempt led by former CEO Sipho Maseko, Telkom has crafted and executed a clear, data-focused strategy, maximising the strength of its extensive infrastructure to redefine itself as a dynamic, integrated telco.
This data-driven shift hasn’t gone unnoticed by investors. A recent analysis from Investec upgraded Telkom’s status to a “buy” rating, raising its target price from R26 to R31. Investec’s enthusiasm is driven by Telkom’s recent performance and its forward-looking strategy. The firm anticipates a 20% improvement in Telkom’s free cash flow for 2025 and an impressive 8.9% compound annual growth rate for operational headline earnings over the next three years.
With a price-to-earnings ratio of 8.2x and an Enterprise Value/EBITDA of 2.5x, Telkom’s valuation metrics reveal strong upside potential compared to other emerging market peers like Telecom Egypt, Maroc Telecom and America Movil.
These gains didn’t materialise overnight, but were the results of a disciplined strategy that Taukobong presented to the market last year. His threefold approach focuses on short-term cash generation through asset sales, mid-term optimisation of core assets, and a long-term expansion into new, high-growth areas.
I believe this strategy is proving effective, not only in terms of cash flow but in reinforcing Telkom’s foundation as a robust, forward-looking digital company.
Taukobong’s approach has manifested in decisive actions, including a R6.75bn sale of Swiftnet to Actis and Royal Bafokeng Holdings, awaiting final regulatory approval. Beyond freeing up cash, this deal aligns Telkom’s portfolio with its goal of leveraging core assets to drive South Africa’s digital future.
Taukobong’s approach has manifested in decisive actions, including a R6.75bn sale of Swiftnet to Actis and Royal Bafokeng Holdings
Simultaneously, Telkom’s property divestment strategy generated an additional R617m, which will enable the company to invest in areas of future growth without compromising its core focus. Furthermore, Telkom’s strength lies in its vast infrastructure assets, especially its fibre network operator, Openserve, which outpaces competitors with an impressive 170,000km of reach.
This infrastructure advantage is only growing; over the past year, Telkom increased its fibre footprint by 13.4%, reaching over 1.26-million homes, with a 19.5% growth in homes connected. With a market-leading connection rate of 49%, nearly half of the homes passed by Openserve become customers, a testament to Telkom’s deep market penetration and strategic positioning.
Telkom’s mobile division is another bright spot in Taukobong’s strategy. The division has posted growth projections of 9.1% by the end of September, dwarfing Vodacom’s 1.7% and MTN’s 3%. With more than 21-million mobile subscribers, Telkom’s success in the mobile market is driven by its commitment to innovation and customer-centred growth.
Focusing on a data-led approach, Telkom has expanded its revenue streams and transitioned away from legacy voice services. In its latest trading update, Telkom reported a 7% increase in next-generation revenue, which now makes up 80.7% of its group revenue. This transition emphasises Telkom’s future-ready approach as it leads the shift to data and digital services in the telecom space.
With competitors still grappling with legacy issues, Telkom’s clear shift towards next-generation technology is a defining advantage.
Once perceived as an “analogue relic of a bygone era”, Telkom is now reimagining its place in South Africa’s telecoms industry as a powerful, agile digital player.
Taukobong’s calm, deliberate style has allowed the company to thrive through consistent strategy and patience. This approach is reminiscent of Smith Jr’s words: “The trees in the forest are active, yes... but their activity is with calm, temperance, strategy, consistency, and faith.”
The foundation that Taukobong has laid is starting to pay dividends. In addition to its infrastructural advancements, Telkom’s financial health is improving, bolstered by the streamlined asset portfolio and robust operational performance. The scepticism that once surrounded Telkom is beginning to fade as the market recognises the depth of the company’s transformation.
Taukobong’s approach to leading Telkom through a turbulent telecom industry is proving to be more than just calm; it’s visionary. Rather than rushing to adopt the latest trends or expand without purpose, Telkom has focused on creating a sustainable, data-driven future, one that positions it to thrive amid current or future challenges.
For Telkom, this has meant transforming South Africa’s digital infrastructure backbone while investing in long-term growth that will shape the country’s telecom space. With Taukobong at the helm, Telkom has found the strategy that fits perfectly.
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