One state-owned company that works without any bailouts
Telkom demonstrates that a state-owned company can be run efficiently and profitably through private-sector involvement.
Telkom was founded on 1 October 1991 when the Department of Posts and Telecommunications (DPT) was broken up.
The Department of Posts and Telecommunications was split into the South African Post Office (SAPO) and Telkom.
At the time, it was mainly a provider of fixed-line telephony services to the business and residential markets in South Africa.
From the outset, the South African government, through the Department of Communications, was the dominant shareholder.
Even after Telkom was listed on the Johannesburg Stock Exchange (JSE) in 2003, where the government sold a large stake in the company, it remained the biggest shareholder.
Today, the Department of Communications and Digital Technologies, the shareholder representative of the South African Government, owns 40.5% of Telkom.
The Public Investment Corporation (PIC), another state-owned company, is also one of Telkom’s biggest shareholders.
Other large shareholders include M&G Investment Managers, PSG Asset Management, The Vanguard Group, and Sanlam Investment Management.
The blend of public and private ownership sets Telkom apart from many other state-owned enterprises, like Denel, Eskom, and South African Airways (SAA).
South African state-owned enterprises, such as those mentioned above, along with the SA Post Office and the SABC, are often poorly run.
They are associated with mismanagement and corruption and rely heavily on government bailouts to survive.
Telkom is different. It is well-run, profitable, pays taxes, and provides value to all its shareholders, including the government.
Compare that to its counterpart, the South African Post Office (SAPO), which was also established by splitting the Department of Posts and Telecommunications.
It remained under government control and became a mess. It was forced to enter business rescue despite receiving billions in bailouts.
So, unlike Telkom, the Post Office is a drain on South Africa’s finances and is widely associated with poor service levels. Very few people use it out of choice.
Telkom is an example to other state-owned enterprises
Telkom, although described as a state-owned company, is essentially privately run and competes favourably against Vodacom, MTN, and Cell C.
Because it is listed on the Johannesburg Stock Exchange, it adheres to stringent financial standards and has a strong, independent board.
It has also helped Telkom transform from a primarily fixed-line telecommunications provider to a fully fledged ICT provider.
Unless it provides competitive services, people will move to another provider to serve their needs. The market will severely punish mismanagement and corruption.
Schalk Louw, a portfolio manager and strategist at PSG Wealth, said Telkom showed what is possible.
He said the latest Telkom results, which were overwhelmingly positive, showed that government entities can run successfully as private companies.
Telkom published its financial results for the six months ended 30 September 2025, which showed the company on the rise.
The Telkom Group’s revenue for the six months increased 3.4% to R22.1 billion, and data revenue was up 7.9% to R13.1 billion.
The strong top-line performance was reflected in the bottom line, with earnings before interest, taxes, depreciation, and amortisation (EBITDA) increasing 7.4% to R6.0 billion.
Louw highlighted that Telkom had numerous struggles over the last few years. However, the management has turned the company around.
“You can see Telkom is reinventing itself. It includes little things like focusing on prepaid mobile services, which Vodacom and MTN do not favour,” he said.
“Telkom said they would focus on pay-as-you-go services, and are using AI to get the right positioning for these products. It has done phenomenally well for them.”
Telkom’s 2026 interim results summary
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