Telkom’s multi-year transformation strategy continues to gain traction, with the telecommunications group reporting a sharp increase in profitability as growing demand for mobile data and fibre services helped offset persistent pressure in traditional voice and enterprise segments.
For the year ended 31 March 2026, Telkom reported a 27.5% increase in profit to R3.55 billion, underlining the success of its shift towards a data-centric operating model. The results reflect a broader trend reshaping South Africa’s telecommunications sector, where operators are increasingly relying on data consumption, fibre connectivity and digital services to drive growth as legacy voice revenues continue to decline.
The group’s performance was supported by a 1.4% increase in revenue from continuing operations to R44.48 billion. While overall top-line growth remained modest, the composition of revenue continued to improve, with higher-margin data services accounting for a growing share of the business. Group data revenue increased by 7.6% to R26.6 billion and now contributes nearly 60% of total revenue, highlighting the extent to which Telkom’s earnings profile has evolved over the past decade.
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Mobile data remained one of the strongest growth engines within the business. Revenue from mobile data services increased by 10.5% during the year as consumers and businesses continued migrating towards data-intensive applications, cloud-based services, video streaming and digital communication platforms. Fibre-related data revenue also advanced by 6.3%, reflecting continued demand for high-speed broadband connectivity across residential and business markets.
The results come amid growing competition across South Africa’s telecommunications industry, where operators are investing heavily in network infrastructure to capture increasing demand for digital services. According to industry estimates, South Africa’s mobile data market has expanded at a compound annual growth rate of more than 15% over the past five years, driven by smartphone adoption, remote working trends and the expansion of digital commerce.
Telkom’s infrastructure subsidiary, Openserve, emerged as a key contributor to growth. The business achieved full-year revenue growth for the first time in nine financial years, a milestone that signals the maturity of its fibre rollout programme and the increasing commercialisation of its network assets. Openserve remains one of South Africa’s largest wholesale fibre operators, competing in a market that has seen rapid expansion as households and businesses migrate from copper-based networks to fibre connectivity.
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The consumer business also delivered a solid performance, benefiting from subscriber growth and sustained demand for data products. Telkom’s mobile subscriber base surpassed 25 million customers during the reporting period, while service revenue growth continued for a fourteenth consecutive quarter. The achievement demonstrates the company’s ability to compete against larger rivals in a highly contested market.
Not all business units shared in the momentum. BCX, Telkom’s information and communications technology subsidiary, continued to face revenue pressure amid subdued corporate technology spending and a challenging economic environment. South African businesses remain cautious about capital expenditure as they navigate weak economic growth, infrastructure constraints and ongoing cost pressures.
Despite these challenges, Telkom succeeded in strengthening profitability through operational efficiencies and disciplined cost management. Group earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 5.8% to R12.48 billion, while headline earnings per share rose by 21.5% to 708.5 cents.
Free cash flow increased by 10.4% to just over R3 billion, reflecting improved cash generation and tighter capital allocation. The strong cash position enabled Telkom to enhance shareholder returns by increasing its dividend payout framework to between 40% and 60% of headline earnings. Shareholders will receive a total dividend of 270.1 cents per share, representing 45% of free cash flow generated during the year.
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The company’s improving financial performance has also been reflected in its market valuation. Telkom’s market capitalisation has increased significantly over the past year, rising from approximately R19 billion at the end of March 2025 to around R31.6 billion, highlighting renewed investor confidence in the group’s strategy and execution.
Looking ahead, management intends to maintain a disciplined investment approach. Capital expenditure intensity is expected to remain between 12% and 15% of revenue during the 2027 financial year, with spending concentrated on expanding mobile network capacity and fibre infrastructure. The strategy is aimed at supporting future revenue growth while protecting margins and strengthening free cash flow generation.
The results suggest Telkom’s turnaround is entering a more mature phase. Having stabilised its operations and strengthened its balance sheet, the group’s next challenge will be sustaining growth in an increasingly competitive telecommunications market where data demand remains robust, but customer acquisition costs and network investment requirements continue to rise.
Telkom Financial Performance Snapshot
| Metric | FY2026 | Change |
|---|---|---|
| Revenue | R44.48bn | +1.4% |
| Profit | R3.55bn | +27.5% |
| EBITDA | R12.48bn | +5.8% |
| Data Revenue | R26.6bn | +7.6% |
| Mobile Data Revenue | – | +10.5% |
| Fibre Data Revenue | – | +6.3% |
| Free Cash Flow | R3.0bn+ | +10.4% |
| HEPS | 708.5c | +21.5% |
| Mobile Subscribers | 25 million+ | Growth |
| Market Capitalisation | R31.6bn | Up from R19bn |
| Dividend | 270.1c/share | Increased |