Digital connectivity has become a critical enabler of South Africa’s productivity, as Telkom had an 8.4% jump in quarterly core profit. In the three months to December 31, the state-linked telecommunications reported that this increase was driven by disciplined cost-cutting and a 7.2% rise in mobile service revenue as consumers continued to buy more data. Adjusted EBITDA climbed to R3.2 billion, with margins expanding to 29.1%, a notable improvement over the same period in 2024.
South Africa operates one of the largest and most advanced telecommunications markets on the African continent, and in 2025, it had reached a level of maturity that few emerging economies can match. In early 2025, the country’s digital landscape showed robust growth with internet users reaching approximately 50.8 million, translating to a 78.9% penetration rate. The mobile sector was particularly dynamic, with connections soaring to 124 million, equivalent to 193% of the population, driven largely by widespread multi-SIM usage. Nearly all of these mobile connections (97.5%) were broadband-enabled via 3G, 4G, or 5G networks, reflecting a strong shift toward high-speed connectivity.
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Infrastructure development kept pace with demand, as fibre-to-the-home networks expanded to cover over 5.5 million households. Connection speeds were solid, with median mobile speeds exceeding 51 Mbps and fixed broadband averaging nearly 48 Mbps. This growth translated into strong financial performance, with overall sector revenue increasing by more than 11% in 2024, fueled primarily by sustained demand for mobile data and fibre-optic services. Despite the dominance of MTN Group and Vodacom Group, which together control roughly 70% of mobile service revenue, Telkom has carved out a distinctive niche as a value-driven data and infrastructure player.
South Africa’s nominal GDP in 2025 is estimated between $410 billion and $426 billion, with real growth hovering at 1.1%–1.3%. In such a low-growth environment, productivity-enhancing sectors matter disproportionately. Telkom contributes to South Africa’s development through four key areas. First, via its division Openserve, it drives digital infrastructure expansion by extending fibre networks beyond wealthy urban centres. Second, by fostering market competition, Telkom has historically helped lower data prices, making digital participation more affordable in a country marked by inequality. Third, through its BCX unit, the company supports the digitalisation of both businesses and government by providing cloud migration, cybersecurity, and systems integration services.
Although Telkom’s overall workforce has shrunk over the years, its pivot toward data-driven services fosters the development of higher-value ICT roles that match the needs of the digital economy. In essence, the company’s stability reinforces the critical infrastructure and services underpinning South Africa’s wider digital advancement.
Telkom’s transformation since its 1991 inception as a state-owned fixed-line monopoly reflects South Africa’s broader economic journey from isolation to integration. Following partial privatisation in 1997 and a JSE listing in 2003, the company faced intensifying competition that forced a strategic reinvention. The 2010s proved particularly pivotal as fixed-line voice revenues collapsed, compelling Telkom to pivot aggressively into mobile services, enterprise ICT through its BCX acquisition, and wholesale fibre infrastructure via Openserve. Although this restructuring came with painful job cuts and asset write-downs, it ultimately produced today’s leaner, data-focused operator positioned for digital-age relevance.
This corporate evolution unfolded alongside crucial telecom reforms that have consistently reinforced South Africa’s macroeconomic stability. Key policy milestones from licensing GSM operators in 1993-94 and creating ICASA in 2000 to introducing competitors like Cell C, passing the Electronic Communications Act of 2005, and conducting recent spectrum auctions demonstrate how sectoral policy functions as economic strategy by other means. Each reform phase bypassed infrastructure bottlenecks, injected capital, stabilised regulation, reduced tariffs, or accelerated network rollout, collectively establishing connectivity as a fundamental driver of broader economic development across the country.
South Africa maintains its position as Africa’s most advanced telecom market by revenue scale, network sophistication, 5G deployment, and fibre density. Telkom’s recovery strengthens this leadership by ensuring robust competition that prevents market concentration from stifling innovation. However, significant challenges persist, including infrastructure crime that cost the sector over R7 billion in 2024, persistent data-cost pressures, rural connectivity gaps, regulatory uncertainty around spectrum refarming, and the capital demands of 5G expansion in a low-growth economy. Managing these risks requires sustained coordination between operators, regulators, and the state.
Telkom and South Africa’s telecom sector stand to benefit from several opportunities: the 2G/3G switch-off by 2027, freeing spectrum for 5G, growth in MVNOs and digital-first offerings, deeper fibre-to-business penetration, expansion of cloud and enterprise ICT services, and energy-efficient network investments as power stability improves. Telkom’s latest earnings represent more than corporate recovery; they demonstrate how telecommunications is woven into South Africa’s economic future, with data connectivity serving as a critical productivity tool.
