We are committed to our purpose of seamlessly connecting our customers to a better life. This reflects an ambition to make life better for all our customers – at work and at home – whether they are learning, being entertained, or connecting with friends, family, and customers from across the world.
By delivering on our purpose, we achieve our goal of leading in the converged ICT space, bringing together fixed, mobile and digital services for our customers.
This is an ongoing challenge, as Telkom operates in a world of continual and rapid change. The word “PIVOT” captures our five‑pronged strategy. It encourages all employees within every team, division, and business unit to drive continual change as we seek new ways to serve our customers.
The graphic alongside outlines our PIVOT Strategy and its five strategic pillars.
PIVOT captures the transformational changes to our core business in response to the shift from voice to data, from copper to fibre, and from fixed-line to mobile. Increasingly our industry will be characterised by many diverse digital services, increased automation and data-driven decision-making. PIVOT speaks to our moving beyond mere connectivity to IT services solutions and digital ecosystems.
Our PIVOT Strategy aligns with the four SDGs most applicable to our business. Refer to Telkom's contribution to the United Nations SDGs for our performance against the SDGs.
The PIVOT Strategy is underpinned by four Group enablers with initiatives to drive continuous improvement in these areas:
In the past year, we have encouraged the business units to monetise our infrastructure assets as OneTelkom.
Our substantial asset portfolio is anchored by over 170 000 km of fibre, which passes over 1.2 million homes. Our assets also include over 7 700 mobile sites, an extensive real estate portfolio, 10 carrier-neutral data centres, and over 600 aggregation nodes with potential as edge data centres. We monetise, or earn revenue from, these assets by utilising them in the deployment of network services such as mobile, fixed-voice and data services, and a broad portfolio of IT services. We also make our assets available for use by third parties such as internet service providers (ISPs) and other network operators.
Telkom has spent billions of rands to purchase, deploy and integrate these assets, and is always looking for new and improved ways to earn revenue from them. OneTelkom is an initiative spearheaded by the GCEO, and fully supported by the Group Exco, to sweat the various assets by collaborating across the various business units (while still respecting wholesale/retail separation boundaries) to win more business, promote operational synergies and drive capital efficiency. While our operating model is still based on federated business units, we have changed the strategic framework to emphasise the synergies between them, rather than their separation.
Improved customer experience depends on simplifying and digitising our processes, and we are implementing initiatives to drive this. Examples from Telkom Consumer include the new MyTelkom app and the revamped Telkom.co.za website.
Despite increased digitalisation, our employees remain the driving force of our business. We need to enable them to cope with our industry’s relentless changes and empower them to make decisions at local level. Therefore, we remain committed to ongoing people development and empowerment. This also considers the technology evolution, internal efficiencies and external cost pressures, which require Telkom to streamline the workforce and introduce new capabilities to maintain financial sustainability.
Our fourth Group enabler is a sustainable financial framework. Telkom’s future sustainability depends on our ability to generate cash from operations consistently. To maintain growth, we need to reinvest that cash into the network, pay off debt, and provide the appropriate returns to our shareholders.
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Strategic priorities | |
Why it is a priority |
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Measures of our progress |
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Why the measures are important | |
FY2022 | FY2023 | FY2024 | |
Target | |||||||||
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P
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Partnerships | Partnerships are critical to enabling the Group strategy. We seek to simplify and maximise the partnership opportunities for the Group. | Revenue from global IT hardware and software partnerships | They show the development of new partnerships to complement our core services. | R965 million | R1 411 million | R1 454 million | Leverage partnerships optimally to support the achievement of the Group strategy. | ||||||||||||||
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I
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Integrated solutions | We want to strengthen our ability to address our customers’ ICT needs comprehensively. This requires the appropriate access solution to seamlessly integrate with various IT services, from traditional (hardware and software) to new and emerging (cloud and IoT) IT services and analytics. |
Beyond connectivity revenue and as % of total mobile
revenue
Enterprise next-generation data in BCX
PaaS solution sitesPaaS solution sites
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They indicate the progress in supplementing traditional connectivity with service offerings that resolve customer pain points. | R1 147 million (5.3%) | R1 177 million (5.8%) | R1 665 million (7.5%) | Offer end-to-end converged propositions from connectivity to IT solutions. | ||||||||||||||
| R410 million | R454 million | R522 million | ||||||||||||||||||||
| N/A | 10 | 59 | ||||||||||||||||||||
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V
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Victory in broadband | We are building new digital services on high-speed data networks and accelerating our capability to disrupt the local broadband market by delivering innovative and value-rich solutions. Telkom offers these to residential and commercial customers via the optimal access technology – copper, fibre, fixed wireless, mobile or satellite. |
Mobile broadband subscribers
in Telkom Consumer
Fibre broadband subscribers
in Telkom Consumer
Fixed broadband data traffic
(petabytes)
Enterprise next-generation
data access revenue in BCX
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Continuous growth in data traffic and associated data revenues, highlights the increasing demand for data-centric services. | 10.7 million | 11.6 million | 12.7 million | Become the leading broadband provider in South Africa. | ||||||||||||||
| 155 000 | 179 500 | 213 400 | ||||||||||||||||||||
| 1 665 | 1 895 | 2 307 | ||||||||||||||||||||
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R1 438 million |
R1
480 million |
R1
561 million |
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O
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Operational efficiency | In an increasingly competitive world, our success depends on continually improving the efficiency and effectiveness of our operations. |
Fibre connectivity rate (%)
Net Promoter Score (NPS) in Openserve
AIOps revenue growth
Fibre average time to install (days)
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These metrics show how we are improving customer experience, increasing capital efficiency, and reducing the cost of maintaining a large property footprint, while generating cash for reinvestment in other areas. | 46.3% | 47.4% | 48.5% | Develop operational superiority, which provides a competitive advantage. | ||||||||||||||
| 66 | 68 | 70 | ||||||||||||||||||||
| N/A | 8% | 9% | ||||||||||||||||||||
| 3.1 | 2.5 | 2.4 | ||||||||||||||||||||
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T
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Technology innovation | We aspire to operate with the best scalable and most efficient network. To achieve this, Telkom invests in the optimal mix of technologies. |
Fibre access connections (number of connections)
Mobile base stations (number of base stations)
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They demonstrate the continual investments we are making to deploy the latest mobile, fixed and digital technologies. | 389 109 | 492 812 | 590 527 | Modernise and build a state-of-the-art, seamless, data-led network that is not easily replicable to sustain our integrated competitive advantage. | ||||||||||||||
| 7 313 | 7 546 | 7 738 | ||||||||||||||||||||
Our strategic framework remains relevant and resilient to the changes in the local and global environment. Within this framework, we modify our specific tactics and actions appropriately as we continue to play a leading role in South Africa’s digital revolution.
Partnerships
Partnerships are essential for our success. By deploying the relevant digital platforms, we aim to enable best-of-breed partners to deliver relevant services quickly and efficiently to our customers.
FY2024 Progress
Five-year strategic partnership with the University of the Witwatersrand to launch the first Telkom Industry Solutions Lab as part of the Wits Innovation Centre. Bringing together multi-disciplinary teams from Wits, Telkom and beyond, this collaborative effort will pave the way for state-of-the-art innovations in telecommunications and the development of transformative digital solutions for various industries.
Read more on Intellectual capital
Strategic partnership between BCX and Alibaba Cloud, the digital technology and intelligence backbone of the Alibaba Group, to bring best-in-class cloud technologies to businesses in South Africa to drive local digitalisation. The two parties signed an exclusive distribution contract in October 2023. This grants BCX the exclusive right and authority to distribute Alibaba Cloud’s products and services in South Africa. A major advantage of BCX’s Africa Local Public (ALP) cloud service is that billing takes place in local currency (ZAR), providing a hedge against currency fluctuations.
Aligns to Integrated solutions
Read more on BCX productive capital
We experienced the benefits of the strategic partnership with Google to land its Equiano cable at Openserve’s cable landing station in Melkbosstrand. Openserve’s investment in Equiano ensured that our subscribers experienced limited disruption following the multiple fibre cable breaks off the coast of Côte d’Ivoire in March 2024, as traffic was quickly rerouted to the Equiano cable.
Read more on Openserve productive capital
Integrated solutions
Integrated solutions speaks to our aspiration to provide value-added services on top of connectivity services. For fixed-line consumers, this means content services, such as media streaming, and smart home solutions, such as web-based security. For mobile subscribers, this involves the bundling of social media applications and creating synergies between fixed, mobile and digital services. In the enterprise space, this includes applications that streamline business service – e-commerce, point-of-sale systems, inventory control, cloud services, the development of digital platforms and embedded cybersecurity. For small and medium businesses, this comprises tools to enable a mobile sales force and cloud-based tools to enable businesses to become more agile, responsive and professional.
FY2024 Progress
BCX launched its Reimagined strategy in FY2023, embarking on a multi-year journey to become a dominant everything-as-a-service (XaaS) provider. This leverages BCX’s expertise and skills to provide a unified offering to our clients regardless of what cloud service they choose – public, private or hybrid, including leading public cloud providers such as Alibaba, AWS, Microsoft Azure, and Huawei. In addition, BCX shows steady growth in enterprise next-generation data revenues.
Beyond connectivity revenue (which includes airtime advance, insurance, content and fintech) in Telkom Consumer continued to increase in real terms and as a percentage of total mobile service revenue. This shows the success in revenue growth on top of the core connectivity services.
In August 2023, Openserve was rated the preferred fibre network operator among ISPs, in part due to the success of the Openserve Connect app. Openserve’s net promoter score (NPS) has increased every year since 2021.
Swiftnet has expanded its service offering in response to increased loadshedding through the deployment of Power-as-a-Service solutions for mobile service providers. These solutions move the burden of providing backup power from the mobile service provider to the tower owner. This facilitates the sharing of power infrastructure between operators, providing cost and efficiency benefits. The rollout of these solutions has increased more than fivefold over the past year, and will continue to grow in the new year.
These metrics indicate the progress being made in supplementing traditional connectivity with service offerings that solve customer pain points
Victory in broadband
Victory in broadband acknowledges our strength as a connectivity provider in fixed and mobile, and our commitment to providing data services to a broad range of customers. Our connectivity services are built on our digital infrastructure assets, which enable the digital needs of corporates, SMMEs and consumers.
FY2024 Progress
We continue to show good progress against the following metrics:
The growth in mobile broadband subscribers in Telkom Consumer highlights our ongoing growth as a mobile broadband provider.
Fibre broadband subscribers in Telkom Consumer have grown by 19% over the past year, highlighting growth as a fixed broadband provider.
Steady growth in fixed broadband data traffic (petabytes) in Openserve, driven by increase in homes connected as well as increased data demand per household.
Enterprise next-generation data access revenue in BCX has also grown on the back of increased data demand and customer growth.
Overall, this continuous growth in data traffic and associated data revenues highlights the increasing demand for data-centric services, and shows how we are executing our strategy to be a leader in fixed and mobile broadband.
Operational efficiency
Operational efficiency reflects the need to be efficient with our resources, digitise our processes and procedures, and leverage platforms and applications to deliver IT services. We aim to reduce costs through economies of scale and simplicity within our operating model.
FY2024 Progress
We continue to drive operational efficiency across several different initiatives, including growth in artificial intelligence for IT operations (AIOps) for internal operations and as a solution for enterprise customers in BCX.
Growth in AIOps in BCX is an example of how we use AI technology to drive efficiency improvements in operations.
Our industry-leading fibre connectivity ratio in Openserve emphasises our relentless focus on converting our investment in homes passed with fibre into revenue‑generating households. This is crucial for long-term sustainability, and to generate cash to cover operating costs and fund future investments.
A steady decrease in the average days for Openserve to install fibre results from continual process refinements across the fibre installation value chain.
In August 2023, Openserve was rated the preferred fibre network operator among ISPs, in part due to the success of the Openserve Connect app. Since 2022, the NPS for Openserve has increased.
These examples showcase improvements in operational efficiency metrics across the business.
Technology innovation
Technology innovation addresses our aspiration to deliver value for customers by deploying technology optimally to improve network experience and reduce service costs. This includes the rollout of 5G base stations for better spectral efficiency, introducing the latest fibre‑optic transmission modules to increase FTTH speeds, and investing in new digital platforms to deliver best‑of‑breed services.
FY2024 Progress
Telkom Consumer is unique in following a hybrid network strategy whereby it builds its own network to serve key customer areas, and roams on other network providers to provide seamless connectivity in other areas. The steady growth in the number of mobile base stations is driven by subscriber and data traffic growth, as well as improvements in network experience.
Openserve continues to grow its fibre access connections on the back of a strategy to build innovative fibre networks that are efficient, resilient and scalable for the future.
These examples demonstrate the continual investments we are making to deploy the latest mobile, fixed and digital technologies.
Telkom executes the strategic pillars and underlying enablers through the different business units, each business unit having specific strategic objectives and focus areas aligned with its mandate. Refer to the productive capital chapter starting on Openserve for information on each business unit’s performance.
Maintain network scalability
Commercialise the network
Transform service delivery
FY2024 performance
Aggressively increased homes passed with fibre by 17.0%, exceeding 182 thousand homes
48.5% FTTH connectivity ratio
EBITDA up 6.6% to R3 934 million
NGN fibre connectivity revenue up
14.5% to R5 633 million
Accelerated mobile growth
Drive broadband adoption
Expand the mobile network
Drive revenue though digital and financial services
up 4.5% to
R22 583 million
FY2024 performance
Mobile service revenue up 6.8% to R19 026 million
Mobile active subscriber base up 11.9% to 20.4 million
Mobile data revenue up 10.6% to R14 300 million
Mobile broadband subscribers up 9.5% to 12.7 million
Mobile EBITDA up 12.6% to R5 036 million
Optimise and grow the masts and towers portfolio
Build new towers to meet mobile network operators’ demand
Expand the range of products and services offerings
FY2024 performance
68 new towers built and 8 in-building coverage solutions (IBS)
Productive portfolio sites grew 0.7% to 4 047 towers
Launched our first 5G outdoor distribution antenna system (oDAS) small cell sites
Successfully tested the technical capability of our PaaS solution at 10 sites
of 74.9%
Commercialise the property portfolio and dispose non-core assets
Reduce building costs and enhance operational efficiencies
FY2024 performance
Terminated non-essential services and reduced property operating costs
Executed several energy management and efficiency projects in pursuit of carbon neutrality and net zero as part of Telkom’s ESG strategy
Migration of clients to next-generation technologies
Shift to higher-margin IT business
Improve the service/product sales mix
FY2024 performance
IT business revenue up 9.9%
IT service revenue up 6.6%
