In the dynamic and challenging landscape we operate in, exacerbated by the financial pressures facing consumers, we remain steadfast in our commitment to delivering competitive high-speed broadband solutions across both the mobile and fibre segments.
Key strategicAccelerated Mobile growth
Drive high-speed broadband
Drive digital and financial services revenue
Strategic achievementsMobile data revenue escalated by 10.6%
Consumer EBITDA grew by 24.2%
Mobile active subscriber base increased by 11.9%
Surge of 21.4% in data traffic
Fibre revenue increased significantly by 26.4%
ChallengesA challenging economy, high fuel costs and loadshedding exacerbate a constrained macro-economic environment
Ongoing site vandalism and battery theft remain critical issues while causing financial losses
Total external revenue from Mobile operations reached R22 583 million, a 4.5% increase, driven by a 6.8% growth in mobile service revenue. In line with our data strategy, our fibre revenue increased by 26.4%, supported by a 9.2% growth in the subscriber base and a 12.2% rise in ARPU, partially offsetting the decrease in legacy revenue. Our Easy Connect products, aimed at providing cost-effective data connectivity for price-sensitive segments, expanded impressively and now constitute 11.2% of our fibre base. Total Telkom Consumer revenue increased by 1.8% to R26 329 million.
Despite the adverse economic climate, our mobile subscriber base now stands at 20.4 million, an 11.9% increase, with a blended ARPU of R84 (FY2023: R86). The post-paid subscriber base remained relatively stable at 2.9 million subscribers, with an ARPU of R180 (FY2023: R201). The pre-paid customer base expanded by 14.3% to 17.5 million, maintaining a stable ARPU of R65 (FY2023: R64). This growth is well within our optimal target range and followed a rigorous subscriber base evaluation, underscoring our commitment to delivering unparalleled customer value and experience while maintaining optimal financial performance.
The Mobile business delivered impressive results despite the challenging operating environment, increasing EBITDA by 12.6% to R5 036 million, at an EBITDA margin of 22.2% (up 1.7 ppts). Our focus on sustainable growth involves continuous refinement of operational efficiency and optimisation of cost structures. Pressures on Mobile EBITDA came primarily from the adverse effects of loadshedding (R236 million) and increased impairment of receivables and contract assets (R348 million), reflecting escalated allocations for impaired debt due to ongoing consumer stress.
At the broader Telkom Consumer level, EBITDA grew by 24.2% to R4 093 million, at an EBITDA margin of 15.5% (up 2.8 ppts).
Economic challenges have prompted a noticeable shift in consumer behaviour regarding acquisition contributions between smartphone voice-inclusive plans and LTE data plans. Notwithstanding the improvement in LTE data plans’ contribution, which indicates a deliberate choice for data connectivity over traditional voice services, the post-paid portfolio still experienced stunted growth. Encouragingly, within the smartphone plans segment, there has been a transition from entry-level FlexOn plans to mid-tier ones, driven by customers’ desire to capitalise on larger mobile data allocations.
In the pre-paid portfolio, the growth was fuelled by the acquisition of higher-quality connections and improved recharging behaviour and ARPUs within the existing customer base.
The preference for personalised pricing was evident in the significant contribution of Mo’Nice, which accounted for over 50% of monthly pre‑paid revenue. To cater for the micro-purchase behaviour prevalent in the pre-paid segment, we have expanded our offerings with youth and mass-market-oriented propositions, including TikTok and WhatsApp bundles. The introduction of these bundles, along with the pre-paid LTE offerings, continues to stimulate the adoption of mobile broadband services, further enhancing connectivity for our customers.
Our Mobile data revenue increased by 10.6% to R14 300 million. The mobile broadband subscriber base increased by 9.5% to 12.7 million, representing 62.3% of our total mobile base now using wireless broadband.
The persistent demand for data continued, resulting in a notable 21.4% increase in data traffic to 1 417 petabytes. In line with our strategic resolve of leading in data, we allocated capex of R2 598 million to the mobile programme, including R972 million for spectrum investments. This facilitated a 2.5% expansion of our network’s coverage, now comprising 7 738 sites. Currently, 51% of data traffic is routed through the 4.5G network, primarily serving fixed wireless access, while 46% continues through the 4G network, predominantly catering to mobile data services. Since the launch of our 5G services, we have deployed 465 active 5G sites. We continue to expand our 4G and 5G fixed wireless access (FWA) footprint and this has resulted in an FWA population coverage of 69%. Additionally, our 4G device adoption rate exceeds 92%, in line with financial prudence and regulatory directives to phase out all legacy technologies, including 3G, by 2025.
To address the impact of loadshedding, we replaced over 5 688 lead batteries with lithium-ion batteries and repaired more than 1 606 sites as part of our efforts to restore services and maintain network resilience.
Additionally, 58 sites were completely vandalised, requiring reconstruction and reinforcement with security measures.
Telkom remains committed to the continued adoption of airtime lending, a service business segment that now represents 31.3% of total pre-paid recharges. Presently, approximately 7.2 million unique customers have leveraged this offering in FY2024, and we have broadened our purview by introducing an auto top-up service for clients who elect to use it. Our beyond connectivity revenue proved to be a strong contributor to our overall growth, exhibiting double-digit growth with a 14% uptick in our mobile financial and micro-content services, yielding R1 665 million.
Our financial services portfolio predominantly consists of our insurance offerings, where we saw 38.4% revenue growth to R281 million, primarily fuelled by an uptick in the average premium. The provision of financial services products and channels not only mitigates risks in our Mobile business but also facilitates the expansion of sales channels and creation of new revenue streams.
Anchored by data-driven insights, we are committed to maintaining a pricing strategy centred on delivering value while concurrently offering segmented value propositions.
Customers with access to Telkom’s diversified digital platforms by 2025:
Businesses with access to digital platform solutions by 2025:
In keeping with our data-led strategy, our competitive price points coupled with personalised pricing options on our Mo’Nice products, has seen us providing increased connectivity solutions to a broader base. To this end, our digital transformation initiatives have consistently delivered positive outcomes.
Over the past three years, we have seen substantial growth in customer adoption, affirming the effectiveness of our strategies. These results underscore the significant return on investment achieved through our digital transformation efforts. Our aim to transition customers from staff-assisted channels to self-service channels is progressing according to plan.
As we endeavour to mitigate legacy risks and prioritise beyond connectivity solutions to bolster profit margins and cultivate customer loyalty, we remain committed to our long-term prospects. Our strategic investments in mobile and fibre technologies will propel the next phase of our growth. Moreover, our business has been strategically positioned to enable us to optimise our cash flows, invest in high-return initiatives and sustain a competitive edge.