Notes to the financial statements | Note 3.1

3. Performance
3.1 Segment information
 

The Group Executive Committee (Exco) is the Group's chief operating decision maker (CODM). Management has determined the operating segments based on the reports reviewed by Exco that are used to make strategic decisions, allocate resources and assess the performance of each reportable segment.

The operating segments' classification is based on the business units through which Telkom provides communications products and services via its customer-facing units: Telkom Consumer and Small and Medium Business (SMB), as well as its subsidiaries, BCX, Openserve and Gyro. The customer-facing units are supported by the Corporate Centre.

The reportable segments have been determined as Openserve, Telkom Consumer, BCX, Gyro and "Other". The SMB segment has been aggregated into the Telkom Consumer segment. The aggregation is based on the similarity in the nature of products and services. SMB's customers include primarily sole proprietors and customers who typically consume simple products and are similar to the product nature and customer profiling within the Telkom Consumer segment. A large portion of the SMB customer base makes use of the Telkom stores channel, which is the same channel as that of the Telkom Consumer customers.

EBITDA is defined as earnings before investment income and finance cost (which includes gains and losses on foreign exchange transactions), tax, depreciation, amortisation, write-offs, impairments and losses of property, plant and equipment and intangible assets, and is also presented inclusive of the following items:

  • Interest revenue
  • Interest on overdue accounts

Interest revenue is included in operating revenue as a separate component of revenue. Interest on overdue accounts is included in other income.

The CODM reviews the performance of the operating segments on an adjusted EBITDA basis.

EBITDA is adjusted for significant once-off costs and income, when applicable. The current period EBITDA has been adjusted for the following costs and income:

  • Restructuring expenses of R160 million
  • Loss on settlement of the TRF of R618 million
  • Gain on the disposal of Swiftnet of R4 408 million

Swiftnet forms part of the Gyro segment. In the current year, Swiftnet was sold effective 31 January 2025, and is presented as a discontinued operation in the Group statement of profit or loss and other comprehensive income for 10 months. The difference on the financial statement line items between the segment and the statement of profit or loss and other comprehensive income relates to Swiftnet. Refer to note 12.2 for details.

March 2025  Openserve 
 Rm 		 Telkom 
Consumer 
Rm 		 BCX 
Rm 		 Gyro 
Rm 		 Other 
Rm 		 Eliminations 
Rm 		 IFRS 16 
reversal 
Rm 		 Consolidated 
Rm 
Revenue from external customers1  4 875  27 689  11 276  725  7  —  —  44 572 
Revenue from contracts with customers recognised over time  4 322  24 109  9 042  25  —  —  —  37 498 
Voice  —  5 014  1 748  —  —  —  —  6 762 
Interconnection  220  578  —  —  —  —  —  798 
Data  4 102  17 962  2 664  —  —  —  —  24 728 
Information technology services  —  —  3 766  —  —  —  —  3 766 
Customer premises equipment related services  —  84  803  —  —  —  —  887 
Interest revenue  —  299  61  —  —  —  —  360 
Sundry revenue  —  172  —  25  —  —  —  197 
Revenue from contracts with customers recognised at a point in time   402    3 218    2 116    —    7    —    —    5 743  
Customer premises equipment  —   3 215   352   —   —   —   —   3 567  
Information technology hardware and software  —   —   1 764   —   —   —   —   1 764  
Sundry revenue  402   3   —   —   7   —   —   412  
Lease revenue  151   70   118   700   —   —   —   1 039  
Insurance revenue  —   292   —   —   —   —   —   292  
Intersegmental operating revenue  7 474   115   1 070   537   284   (8 927) (553) —  
Other income (adjusted for once-off income) 263   615   42   581   1 488   (1 437) —   1 552  
Total expenses (adjusted for once-off costs) (8 607) (22 852) (11 012) (408) (1 300) 10 364  —  (33 815)
Cost of handsets, equipment, software and directories   —    (3 731)  (1 641)  —   —   187   —   (5 185)
Sales commission, incentives and logistical costs  —  (3 214) —  —  —  —  —  (3 214)
Payments to other operators  (623) (2 117) (369) —  —  416  —  (2 693)
Employee expenses  (3 072) (1 222) (3 404) (31) (329) —  —  (8 058)
Other expenses  (303) (6 119) (4 026) (113) (292) 8 091  —  (2 762)
Insurance service expenses  —  (202) —  —  —  —  —  (202)
Maintenance  (2 000) (2 618) (858) (37) (399) 868  —  (5 044)
Marketing  (58) (793) (89) —  (15) —  —  (955)
Impairment of receivables, contract assets and loans  22  (1 226) (137) (6) 5  —  —  (1 342)
Service fees  (2 385) (1 334) (481) (219) (250) 670  —  (3 999)
Lease-related expenses  (188) (276) (7) (2) (20) 132  —  (361)
Adjusted EBITDA for reportable segments including intersegmental transactions and excluding once-off costs and income   4 005  5 567  1 376  1 435  479  —  (553) 12 309 
Once-off costs and income                          
Gain on disposal of Swiftnet                        4 408 
Restructuring expenses                       (160)
Loss on settlement of the TRF                       (618)
EBITDA                       15 939 
Depreciation, amortisation,                         
impairments and write-offs                       (5 962)
Operating profit                       9 977 
Investment income                       382 
Net finance charges, hedging costs                         
and fair value movements                       (1 998)
Profit before taxation                        8 361 
Other segment information                          
Capital expenditure of property, plant and equipment and intangible assets   2 535   2 797   392   248   114   —   —   6 086 

March 2024   Openserve
Rm 		 Telkom
Consumer
Rm 		 BCX
Rm 		 Gyro
Rm 		 Other
Rm 		 Eliminations
Rm 		 IFRS 16
reversal
Rm 		 Consolidated
Rm 
Revenue from external customers1  4 526  26 140  11 779  785  —  —  —  43 230 
Revenue from contracts with customers recognised over time  4 072  22 525  9 259  —  —  —  —  35 856 
Voice  —  5 244  2 023  —  —  —  —  7 267 
Interconnection  247  526  —  —  —  —  —  773 
Data  3 825  16 178  2 586  —  —  —  —  22 589 
Information technology services  —  —  3 833  —  —  —  —  3 833 
Customer premises equipment related services  —  96  753  —  —  —  —  849 
Interest revenue  —  314  64  —  —  —  —  378 
Sundry revenue  —  167  —  —  —  —  —  167 
Revenue from contracts with customers recognised at a point in time  327  3 334  2 520  —  —  —  —  6 181 
Customer premises equipment  —  3 301  276  —  —  —  —  3 577 
Information technology hardware and software  —  —  2 244  —  —  —  —  2 244 
Sundry revenue  327  33  —  —  —  —  —  360 
Lease revenue  127  —  —  785  —  —  —  912 
Insurance revenue  —  281  —  —  —  —  —  281 
Intersegmental operating revenue  7 985  189  1 136  699  219  (9 578) (650) — 
Other income  262  721  62  20  1 031  (1 201) —  895 
Total expenses  (8 839) (22 957) (11 683) (418) (966) 10 779  —  (34 084)
Cost of handsets, equipment, software and directories  —  (3 867) (2 361) —  —  103  —  (6 125)
Sales commission, incentives and logistical costs  —  (2 748) —  —  —  —  —  (2 748)
Payments to other operators  (736) (2 664) (380) —  —  452  —  (3 328)
Employee expenses  (2 851) (1 111) (3 432) (123) (378) —  —  (7 895)
Other expenses  (292) (6 452) (3 674) (36) (229) 8 488  —  (2 195)
Insurance service expenses  —  (185) —  —  —  —  —  (185)
Maintenance  (2 034) (2 520) (1 102) (32) (79) 923  —  (4 844)
Marketing  (33) (672) (117) —  (7) —  —  (829)
Impairment of receivables, contract assets and loans  (73) (1 445) (161) 6  (11) —  —  (1 684)
Service fees  (2 636) (1 188) (432) (229) (209) 693  —  (4 001)
Lease-related expenses  (184) (105) (24) (4) (53) 120  —  (250)
EBITDA for reportable segments including intersegmental transactions   3 934  4 093  1 294  1 086  284  —  (650) 10 041 
Depreciation, amortisation, impairments and write-offs                       (5 561)
Operating profit                       4 480 
Investment income                       253 
Net finance charges, hedging costs and fair value movements                       (2 197)
Profit before taxation                       2 536 
Other segment information                          
Capital expenditure of property, plant and equipment and intangible assets  2 547  2 651  416  359  161  —  —  6 134 
1 Revenue includes transactions generated by subsidiaries of BCX in countries outside of South Africa. These are however not considered material to the Group and are thus not disclosed separately.

Entity-wide disclosures

All material non-current assets, other than financial instruments, deferred tax assets, post-employment benefit assets, and rights arising under insurance contracts related to the segments above, are located in South Africa. Assets belonging to the subsidiaries of BCX outside of South Africa are not considered material to the Group as a whole.

No single customer contributes more than 10% of the revenue from external customers and thus no specific information relating to major customers is included in the segment information above. For the purpose of assessing revenue contribution per customer, management does not treat the South African government as a single customer, but views each department/municipality within the government as a single customer.