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Our value-creation strategy
Our strategy review

We continuously review our strategy to ensure it is relevant in our changing operating environment.

Group strategy

The group strategy is actionable by our five key strategic objectives. These objectives are:

  • 1
    Be South Africa’s number one digital transformation partner
  • 2
    Grow into South Africa’s number-one broadband and data services business
  • 3
    Be the communications infrastructure provider of choice
  • 4
    Be the largest provider of data-driven digital marketing solutions for South African SMEs
  • 5
    Unlock value through commercialisation of the property portfolio

These strategic objectives must be delivered in an increasingly complex, challenging and changing external environment.

Our customers are at the heart of all we do, and this is reflected in our strategy. The five strategic objectives are supported by specific business unit and group enablers. These include our evolving operating model, people and organisational capabilities, a sustainable cost base, superior customer experience and a sustainable regulatory stance.

Operating model

Telkom’s operating model separates businesses and improves our focus, accountability, and decision-making, as well as generating a real incentive to innovate, meaning we always put the customer first. The benefits include:

  • a clear sense of identity, mission and focus within each business unit;
  • clearer decision-making responsibilities facilitating action, allowing for faster solution delivery;
  • better aligning incentives to business unit goals, helping drive focus and teamwork; and
  • commercial sustainability will drive business units, fostering greater accountability and encouraging appropriate business behaviours.

To guarantee that we can deliver on our strategic initiatives, we have reviewed whether our operating model is fit-for-purpose and facilitates our strategies. The continuous review of our operating model ensures:

  • increased focus in each line of business;
  • leaner and more agile structures in our Corporate centre and in each of our business units;
  • clearer accountability and separate mandates for each business unit; and
  • more transparent financial and operational performance and capital and cost allocation.

The group will follow a measured and phased approach to the potential divisionalisation, starting in FY2019 after the implementation plans have been set out and agreed between all stakeholders. It is envisaged that this process will have a positive impact on the operational efficiency of the group as a whole.

Telkom’s strategy

Telkom’s strategy

The above mentioned enablers are throughout the report

Business unit strategic focus

To support our group strategies, we have identified the key strategic focus areas for each business unit.

Business unit Key strategic focus areas
Performance
  • Modernise the network
  • 157 400 km of fibre deployed
  • 2.5 million premises passed
    homes passed up 62.3 percent to 356 684
    fibre to the cabinet passed up 12.3 percent to 2.2 million
  • Commercialise the network
  • Fixed line broadband consumption up 34.3 percent
  • FTTH connectivity rate of 30.7 percent
  • Fibre to the base station up 14.6 percent to 6 791
  • Fibre to the business up 70.3 percent to 89 818 end points terminating
  • Transform service delivery
  • 24 percent reduction in re-dispatch rate
  • 16 percent increase in interaction Net Promoter Score

 

     
Business unit Key strategic focus areas
Performance

  • Mobile growth
  • Service revenue growth of 47.2 percent
  • Active mobile subscribers growth of 30.2 percent to 5.2 million
  • Blended ARPU growth of 10.2 percent to R98.19
  • Mobile broadband subscribers up 37.5 percent to 3.6 million
  • High-speed broadband growth
  • High-speed broadband customers up 36.4 percent to 1.2 million*
  • Fixed broadband average revenue per user (ARPU) up 20.5 percent
  • 54.5 percent growth in uncapped products
  • 62 percent growth in data due to increased video usage and uncapped usage
  • Content and value-added services
  • >200 thousand LIT music unique users
  • >160 thousand LIT video unique users
  • ~20 thousand LIT TV boxes in the market

* This includes LTE customers


Business unit Key strategic focus areas
Performance

  • Cloud computing
  • SAP HEC “Ready to deliver” certification achieved
  • Azure hyperscale cloud offering available
  • Cloud marketplace ready
  • Virtustream offering
  • Big data analytics
  • BCX Insight business unit formed
  • Approach is to build and partner
  • Invested in the Explore Data Science Academy that will
    produce 100 data scientists from 2018
  • IoT
  • BCX Smart business unit formed
  • Revenue of R150 million
  • 100 000 devices and sensors managed
  • Strategic partnerships to grow industrial IoT capability and offering
  • Cybersecurity
  • BCX Secure business unit formed
  • Cybersecurity revenue up 48 percent to R150 million
  • Form strategic alliances with leading global players

 

Business unit Key strategic focus areas
Performance

  • Commercialise the property portfolio
  • 40 properties selected for phase 1 development pipeline
  • Commenced with town planning
  • Exploring project development funding options and strategic partnership opportunities
  • Optimise the mast and tower portfolio
  • 6 500 towers across South Africa
  • 1 300 co-located towers
  • 1 000 towers prime for additional co-location
  • Enhance building operation efficiencies
  • >1 400 properties under management
  • Utilities management, space utilisation efficiencies
  • Office consolidation to optimise occupancy costs

 

     
Business unit Key strategic focus areas
Performance

  • Stabilise the business
  • Started the journey to transform into a digital-focused business
  • Optimise and rationalise traditional costs
  • Rationalised product offerings to focus on e-commerce marketplace offerings
  • Reposition, refresh and evolve the brand
  • Rebranding Trudon to Yellow Pages
  • Rebuild iYP to create an e-marketplace
  • Launched the new Yellow Pages app
    16 000 downloads since launch