By Susan Olalere 
In a remarkable financial turnaround, South Africa’s Telkom has reinstated dividend payments for the first time since 2020, following a 62.3% surge in full-year earnings for the fiscal year ending March 31, 2025. Riding on strong performance in its mobile and fibre businesses and a one-time windfall from the strategic sale of its tower unit Swiftnet, Telkom has declared a R1.3 billion return to shareholders—signaling renewed strength and stability for the JSE-listed telco.
The dividend payout comprises a final dividend of 163 cents and a special dividend of 98 cents per share, highlighting the telco’s commitment to shareholder value after a period of fiscal conservatism marked by spectrum auction obligations and market headwinds.
Reshaping a Legacy Brand into a Mobile and Fibre Powerhouse
Once dominated by its fixed-line heritage, Telkom has pivoted aggressively toward mobile and data-driven infrastructure. Its mobile service revenue climbed 10.2%, while fibre-linked data revenue grew by 10%, led by its consumer-facing Openserve and enterprise-focused BCX units. Subscriber growth in the mobile segment jumped 19.5% to reach 15.2 million users, evidence that Telkom’s data-centric strategy is beginning to yield dividends—literally and operationally.
The company’s group revenue rose 3.3% to R43.8 billion, surpassing analyst estimates. EBITDA grew by 25.1% to R11.7 billion, expanding margins to 26.9% despite macroeconomic pressures such as inflation and load-shedding.
But the true game-changer was the R6.75 billion Swiftnet sale, finalized in March 2025 to Actis and Royal Bafokeng Holdings, which generated a profit of R4.4 billion. This capital injection helped Telkom post a 299% increase in profit, from R1.88 billion to R7.5 billion.
“This year’s robust performance and strategic execution allow us to share the fruits of our success,” said CEO Serame Taukobong, noting that the dividends reflect both financial confidence and future intent.
Recalibrating for Long-Term Growth
The board’s decision to resume dividends and revise its payout policy—now targeting 30–40% of free cash flow after capex—reflects a critical shift in Telkom’s balance sheet philosophy: growth without compromising fiscal discipline.
Telkom’s leadership sees the Swiftnet sale as more than a liquidity play. It marks a deeper reorientation toward leaner, more agile operations. With an infrastructure-light vision, Telkom is now focusing on its core strength in data delivery, reducing reliance on legacy systems, and expanding into next-gen technologies like LTE and high-speed fibre.
Still, Telkom’s future will not be without challenges. Competition from MTN, Vodacom, Rain, and other upstarts remains fierce. The decline of fixed-line services, now a mere 22% of total revenue (from 56% in 2013), underscores the urgency of its transformation. The failed Vodacom–Maziv merger further complicates sector consolidation, while macroeconomic stressors continue to weigh heavily on telecom margins.
Investor Sentiment and the Road Ahead
Investors welcomed the dividend news with a 5.5% bump in Telkom’s share price, pushing it to R25—well above recent lows, though far from its 2019 peak of R100. The resumption of payouts serves as a positive signal for long-term investors, but analysts remain cautiously optimistic.
“While the Swiftnet divestiture inflated this year’s numbers, the underlying performance—especially in mobile and fibre—is promising,” said a leading analyst covering the telecom sector. “Sustaining growth without the boost of one-off sales will be the real test.”
Looking forward, Telkom is betting on mobile network upgrades, fibre penetration, and collaborations with global tech leaders like Microsoft to expand its footprint beyond South Africa. Plans to explore radio access network sharing also point to cost-effective expansion strategies in high-demand areas.
Opeoluwa Okudero
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