Telkom Group, South Africa's largest fixed-line operator and formerly state-owned incumbent, has reached a pivotal milestone in its digital transformation, with data now generating nearly two-thirds of its operating revenue.

In its trading update for the first quarter ended June 30, Telkom reported that data accounted for 62.4% of group operating revenue, marking a decisive shift from the company's voice-first heritage toward a data-led business model. The figure underscores how mobile broadband, fibre connectivity, and enterprise digital services have become Telkom's primary growth engines, while traditional fixed-line revenue continues its long-term structural decline.

The results also mirror a broader transformation across Africa's telecommunications industry, where operators are evolving from voice service providers into digital infrastructure companies centered on connectivity, cloud computing, and enterprise technology. Competitors MTN and Vodacom have been pursuing similar data-centric strategies, and across the continent, voice's share of operator revenue has been steadily contracting as smartphone adoption and data demand accelerate.

"Data remains the cornerstone of our strategy, contributing 62.4% of Group operating revenue," Telkom stated in its trading update, adding that its performance reflected "continued execution against our strategic priorities." The company attributed growth to sustained investment in mobile, fibre, and digital services alongside disciplined capital allocation.

For a business whose fortunes were once tied almost entirely to copper telephone lines, the transformation is particularly striking. Today, Telkom's strongest growth originates from mobile data, fibre broadband, and cloud services, reflecting how both consumer and enterprise demand has migrated away from traditional voice offerings.

The mobile business stood out as one of the group's strongest performers during the quarter. Mobile service revenue climbed 10.2%, buoyed by robust demand for data. Mobile data revenue increased 11.4%, while prepaid service revenue grew 9.1%, propelled by customer base expansion and higher data consumption.

Telkom also emphasized the expanding role of artificial intelligence within its consumer operations. AI-driven customer value management platforms now account for 54.6% of prepaid service revenue, enabling personalized offers and enhanced customer engagement.

Openserve, the group's wholesale infrastructure division, continued extending South Africa's fibre footprint. Homes passed rose 13.2% year on year, and fibre subscribers grew 15.5%, reflecting sustained demand for high-speed broadband. During the quarter, Openserve also launched its own internet service provider to improve infrastructure monetization while preserving its open-access strategy. The move is notable given Openserve's structural separation as a wholesale-only unit, designed to provide non-discriminatory access to competing retail ISPs, a model that has underpinned fibre market competition in South Africa.

"We continue to invest in expanding our fibre footprint while improving utilisation of our network assets," the company said.

BCX, Telkom's enterprise technology subsidiary, posted mixed results as corporate clients maintained cautious IT spending patterns. BCX's overall revenue fell 10.9%, largely due to lower hardware and software sales. However, the business delivered strong growth in higher-margin digital services, with cybersecurity revenue surging 36.6% and cloud revenue rising 11.8%, reflecting mounting enterprise demand for managed security and cloud solutions. The cybersecurity growth also aligns with a broader escalation in cyber threats targeting African enterprises, where security budgets have been rising across sectors.

Telkom indicated that BCX remains focused on broadening its digital portfolio while strengthening artificial intelligence capabilities to support customers through their technology transformation initiatives.

At the group level, Telkom stated that disciplined execution and sustained investment in digital infrastructure position the company for long-term sustainable growth despite persistent macroeconomic pressures.

"The Group remains focused on executing its strategic priorities, driving operational efficiencies and investing in future growth opportunities," the company said.

While legacy fixed-line and voice services continue their structural decline, the latest results indicate those businesses no longer define Telkom's trajectory. Growth is increasingly driven by mobile broadband, fibre connectivity, cloud computing, and cybersecurity, reshaping the company into a modern digital infrastructure provider.

Source: TechCabal