Telkom CEO on full-year earnings, fintech plans & spectrum deadlock

Telkom, the South African telecommunications giant, has recently reported a remarkable 53.4% increase in headline earnings per share for the period ended March. The company's mobile data revenue surged by 41%, while its mobile customer base witnessed a significant growth of 27.8%. Telkom credits the success of its next-generation revenue, which now contributes more than 65% to the group's overall revenue, for these stellar financial results. To dive deeper into these impressive figures and shed light on Telkom's future plans, Sipo Maseko, the CEO of Telkom, joins CNBC Africa for an exclusive interview. During the discussion, Maseko revealed the company's strategic shift towards the new decade, emphasizing the importance of capitalizing on broadband services in both fixed and mobile sectors. Maseko highlighted the infinite potential of broadband usage, contrasting it with the finite nature of voice communication. Telkom's forward-thinking approach in network design and capital deployment positions them well to meet the evolving demand for broadband services. Looking ahead, Maseko envisions leveraging this momentum to create lasting value for Telkom's shareholders. The conversation then shifted towards Telkom's foray into the Fintech space, with Maseko outlining the company's initiatives in driving its insurance business, payment wallet services, and strategic partnerships with the likes of Easy Equities. By democratizing access to financial services and investments, Telkom aims to establish a robust ecosystem that benefits both the company and its customers. Maseko emphasized the importance of collaboration in building a winning ecosystem, signaling Telkom's commitment to innovation and inclusivity in the financial services sector. However, the conversation took a somber turn as Maseko addressed the ongoing deadlock over spectrum allocation in South Africa. Telkom, like many other industry players, faces challenges due to the delayed release of spectrum, hindering the company's ability to expand and enhance its services. Maseko expressed disappointment over the deadlock and stressed the urgent need for spectrum availability to fuel industry growth and innovation. Despite efforts to engage with stakeholders, Telkom was compelled to seek legal intervention to address the spectrum issue transparently and fairly. Maseko highlighted the importance of a level playing field to ensure fair competition and industry advancement. As the interview concluded, Maseko reflected on Telkom's subsidiary, BCX, and its resilience amid the pandemic. Despite the disruptions caused by remote work trends, Maseko remains optimistic about BCX's turnaround and the evolving digital landscape for enterprises. Investors are closely monitoring Telkom's performance, with expectations of a potential dividend announcement in November. Maseko acknowledged the risks associated with dividend payouts, particularly in relation to spectrum uncertainties. However, he remained optimistic about Telkom's stable operational cash flow and the company's trajectory towards rewarding its patient shareholders. With a clear strategic vision and a steadfast commitment to innovation, Telkom under Maseko's leadership appears well-positioned to navigate the challenges and opportunities in the dynamic telecommunications industry.