Telkom FY profit more than doubles

Telkom, South Africa's third largest telco group, has made a remarkable comeback with its headline earnings per share doubling to 376 cents in the year ending March. The company attributes its profitable year to a robust operational performance that saw its subscriber base exceed 20 million, as well as effective cost optimization initiatives. Despite the positive financial results, dividends remained stagnant. CNBC Africa spoke with Serame Taukobong, the CEO of Telkom Group, to delve deeper into the company's performance. Taukobong highlighted the growth in mobile revenue, particularly in the prepaid segment, which held steady average revenue per user (ARPU) amidst market challenges and economic uncertainties. The company's strategy of providing affordable value propositions tailored to the needs of price-sensitive customers has resonated well in the market, with prepaid revenue showing resilience. Additionally, Taukobong addressed concerns regarding BCX's underperformance, acknowledging the shift from traditional connectivity to more IT-based services affecting the business segment. Despite challenges, he expressed optimism about the growth potential in cloud services and cybersecurity within BCX. Telkom's fiber business, notably OpenServe, has displayed strong performance, connecting more households and driving growth. Taukobong emphasized the significance of generative AI in enhancing customer retention and driving business growth across all segments. By leveraging predictive analytics and customer behavior insights, Telkom has been able to offer personalized services and maintain customer loyalty. Regarding strategic initiatives, Telkom is progressing with the disposal of My SwiftNet, with shareholder approval secured and ongoing regulatory processes. The company aims to finalize the transaction within the next six to nine months. As political dynamics evolve in South Africa, Telkom remains optimistic about its relationship with potential new shareholders under a government of national unity, citing positive engagements in previous dealings. In response to inquiries about merger and acquisition prospects, Taukobong reiterated Telkom's commitment to making decisions aligned with the best interests of the business and shareholders. While no new suitors have approached Telkom recently, the CEO underscored the inevitability of industry consolidation and the company's readiness to adapt to market trends. Telkom's resilient performance amid economic challenges and its strategic focus on innovation and customer-centric approaches position the company for continued growth and stability in the telecommunications sector.