The world we operate in
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We monitor both local and global trends to assess their potential impact on our markets and customers. We adapt our strategy to leverage the associated opportunities and mitigate the risks where needed.
Global economic growth proved more resilient than anticipated, expanding by an estimated 3.3% in 20251, with initial expectations that it would remain stable into 2026. However, the escalation of the conflict involving the United States, Israel and Iran prompted the International Monetary Fund (IMF) to revise its outlook downward. In an April update, the IMF forecast global growth of 3.1% for the year.
The ultimate impact will depend on the duration and intensity of the conflict. Rising energy prices, infrastructure disruption, supply chain constraints and weakened market confidence have already eroded the earlier, stronger outlook, with recovery expected to take time.
South Africa’s economic growth was initially forecast at 1.8%. However, the escalating tensions have seen it revised downward to 1%. The most significant impact has been through elevated oil prices, which have placed upward pressure on domestic inflation. Higher fuel costs have increased transportation expenses, contributing to rising food inflation. The rising cost of living leave consumers and businesses with reduced capacity to absorb further price pressures, resulting in heightened financial strain across the economy.
Overall, the decline in macro-economic risks offers limited support for household expenditure and business and consumer confidence.
1 Source: International Monetary Fund (IMF), World Economic Outlook Update, January 2026.
The deterioration in global and domestic macro-economic conditions will put pressure on household disposable incomes and business cash flows. Accordingly, demand is expected to shift further towards affordable, essential connectivity and value-for-money digital services. Telkom will therefore continue to emphasise cost-effective fixed and mobile broadband, supporting customer retention and usage resilience in a constrained economic environment.
Elevated inflation, energy costs and broader input price pressures reinforce the importance of rigorous capital discipline and operating efficiency. Telkom will prioritise strategic investments with clear demand visibility and long-term returns, particularly in fibre, mobile capacity and digital platforms. At the same time, we will maintain a strong focus on cost containment, network efficiency and balance sheet resilience.
Further reading: Material themes, strategic risks, and GCFO's report.
