Telkom SA SOC Limited, the Pretoria-based telecommunications provider, reported stronger first-quarter earnings as higher mobile and fiber data revenue offset continued weakness in its corporate IT business. For the three months ended June 30, group revenue increased 2.6 percent to R11.1 billion ($671 million), up from R10.82 billion ($653.6 million) in the same period last year, as higher data usage continued to support growth across its core operations.

The stronger revenue performance translated into higher profitability. Group earnings before interest, taxes, depreciation and amortization (EBITDA) climbed 10 percent to R3.08 billion ($186.1 million), while the EBITDA margin widened by 1.8 percentage points to 27.7 percent. The improvement reflected sustained growth in mobile data revenue alongside tighter control of operating costs, which declined 1.9 percent during the quarter.

Data services remained the group’s largest source of income, accounting for 62.4 percent of total revenue, up from 58.8 percent a year earlier. Mobile data revenue rose 11.4 percent to R4.67 billion ($282.1 million) as mobile data traffic increased 19.6 percent to 574 petabytes. Overall mobile service revenue grew 6.4 percent to R5.73 billion ($346.1 million), supported by a 9.1 percent increase in prepaid service revenue to R3.97 billion ($240 million).

Mobile subscribers reach 25.3 million

The quarterly performance also reflected continued growth in Telkom’s customer base. Active mobile subscribers increased 6.1 percent to 25.3 million, driven by a 7.1 percent rise in prepaid customers to 22.3 million, while average revenue per user remained steady at R59 ($3.56). Data subscribers climbed 15.5 percent to 19.8 million and now account for more than three-quarters of the mobile base.

Higher customer activity helped lift mobile EBITDA 17.6 percent to R1.92 billion ($116 million), with the division’s EBITDA margin improving to 29.1 percent. Growth also continued at Openserve, Telkom’s wholesale infrastructure business, as demand for fiber services remained strong. Revenue increased 5.6 percent to R3.32 billion ($200.6 million), while external wholesale revenue jumped 18.2 percent to R1.475 billion ($89.1 million).

Fiber services remained the main driver of Openserve’s performance. Fiber-related data revenue rose 6.6 percent to R2.67 billion ($161.4 million). During the quarter, the company expanded its network to 1.565 million homes passed and connected 843,563 homes, raising its connectivity rate to 53.9 percent. EBITDA increased 6.7 percent to R1.101 billion ($66.5 million), leaving the division with an EBITDA margin of 33.2 percent.

BCX EBITDA rises despite revenue decline

BCX, Telkom’s enterprise technology unit, remained under pressure as weaker demand for hardware and software weighed on results. Revenue fell 10.9 percent to R2.59 billion ($156.8 million), with hardware and software sales down 30.1 percent to R424 million ($25.6 million) and converged communications revenue declining 11.1 percent to R1.084 billion ($65.5 million). Core IT services revenue was broadly unchanged at R1.048 billion ($63.3 million). Despite lower revenue, EBITDA rose 2.6 percent to R194 million ($11.72 million) on stronger IT services margins and lower operating costs, lifting the EBITDA margin to 7.5 percent.

Capital spending slowed during the quarter as several multiyear network projects reached completion. Group capital expenditure declined 19.4 percent to R888 million ($53.7 million), reducing capex intensity to 8 percent from 10.2 percent a year earlier. Telkom invested R421 million ($25.4 million) in its mobile network, adding 84 base stations to increase its total network footprint to 8,504 sites while continuing to upgrade its digital platforms. Openserve invested R379 million ($22.9 million) in network expansion and modernization.

The company also continued to unlock value from its property portfolio. It completed the sale of 100 properties for R200 million ($12.1 million), while another 105 properties worth R264 million ($16 million) remain in the conveyancing process. Management maintained its guidance for the current financial year, expecting capital expenditure to increase later in the year and capex intensity to finish within its target range of 12 percent to 15 percent.

Strengthened cross-border corporate communications

The latest quarterly results build on a solid performance in the 2026 financial year. The Johannesburg-based telecommunications group, led by Chief Executive Serame Taukobong, reported full-year revenue of R44.48 billion ($2.74 billion), compared with R43.88 billion ($2.68 billion) a year earlier. Growth was supported by its consumer business and Openserve, while BCX continued to face softer trading conditions in parts of its business.

Data revenue rose 7.6 percent to R26.6 billion ($1.64 billion), accounting for nearly 60 percent of total revenue. The growing contribution from data services helped offset weaker enterprise spending and reflected the company’s continued investment in mobile broadband and fiber infrastructure. Profitability also improved over the year. Adjusted EBITDA increased 5.8 percent to R12.48 billion ($770.1 million), with the EBITDA margin expanding to 28.1 percent. Telkom attributed the improvement to lower operating expenses, which fell 1.1 percent, together with greater efficiency across its network operations and support functions.