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Telkom, the majority government-owned telco, recorded R2 billion in profit in its FY2024 results on the back of an infrastructure-focused strategy. The company now has over 20 million subscribers, up from 18 million in FY23. The company will consider paying dividends in FY2025 for the first time since 2020.
In November 2023, Telkom announced a pivot to an infrastructure-focused model which focuses on building and maintaining infrastructure assets including fibre networks, data centres, satellite, and marine cables. As part of the pivot, the company sold off its tower mast subsidiary Swiftnet for R6.75 billion and laid off over 1,700 employees.
The strategy and subsequent restructuring have seen the company grow its cash flow to R424 million, a 116% increase from FY2023. The company also grew its operating profit to R3 billion from the R1.3 billion recorded in FY2023.
“From a loss position in the prior year, profit for the year increased by over 100% to R1.9 billion boosted by the non-recurrence of once-off restructuring costs and lower depreciation,” said CEO Serame Taukobong.
To maintain the growth trajectory, the company will be making further capital investments in its mobile network business and fibre subsidiary Openserve which recorded revenues of R12 billion. Furthermore, the telco will explore radio access network sharing with other mobile network operators to minimise capital expenditure.
“[Through the infraco strategy] we will invest capex in identified growth areas ahead of time to improve our future operating profit, cash flow and, ultimately, returns on the capital invested,” added Taukobong.