Telkom’s voice era is over. Data now pays the bills
Telkom Group, South Africa's legacy telecom operator, has data now accounting for nearly two-thirds of its operating revenue.
South Africa's telco giant, Telkom Group, has officially declared the end of its voice-centric era, with data now generating nearly two-thirds of its operating revenue. This significant shift towards a data-driven model underscores the company's successful transition from a traditional voice operator to one focused on mobile broadband, fiber connectivity, and enterprise digital services.
In its latest trading update for the first quarter ending June 30, Telkom highlighted that data contributed 62.4% of its group operating revenue, a testament to the increasing importance of data in the telecommunications landscape. This transformation mirrors a broader shift across Africa's telecom sector, where operators are evolving from voice providers to digital infrastructure companies.
Telkom's mobile business remained a strong performer, with mobile service revenue up 10.2%, driven by robust demand for data services, which grew by 11.4%. Prepaid service revenue also increased by 9.1%, thanks to customer growth and higher data consumption. A notable addition to Telkom's growth engines is the rising influence of artificial intelligence (AI) in its consumer business, with AI-driven customer value management platforms now accounting for 54.6% of prepaid service revenue.
This not only personalizes offers but also enhances customer engagement. The company's wholesale infrastructure arm, Openserve, continued to expand South Africa's fiber footprint, with homes connected increasing by 13.2% year on year and fiber subscribers growing by 15.5%. Telkom's enterprise technology subsidiary, BCX, faced mixed results due to cautious business spending, but it did see strong growth in higher-margin digital services, such as cybersecurity and cloud solutions.
Despite this, BCX's overall revenue declined by 10.9%. Nonetheless, Telkom remains focused on executing its strategic priorities, investing in digital infrastructure, and driving operational efficiencies to ensure sustainable long-term growth, even in the face of persistent macroeconomic pressures.
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