End of a painful era for Telkom
After a decade of decline driven by an exodus of digital subscriber line (DSL) customers, Telkom’s wholesale fixed-line business, Openserve, is showing encouraging signs of a revival.
Telkom recently reported R12.63 billion in revenue at Openserve in the group’s 2025/26 financial year, up 2.3% from R12.34 billion in 2024/25.
This was the first time that the division increased its full-year revenue since 2017, when it started seeing a drastic decline in fixed-line broadband customers.
The company’s fixed access line decline began in 2000, driven by increased cellular service uptake, which reduced demand for telephone lines.
Between 2000 and 2016, Telkom fixed access lines dropped from around 5.5 million to 3 million. However, its fixed broadband subscriber base grew from fewer than 10,000 to more than 1.02 million.
That was due to its dominance in copper-based digital subscriber line (DSL) services, a product which accounted for 1.01 million customers on its own at the time.
The rapid deployment of fibre-to-the-home (FTTH) by fibre network operators (FNOs) like Vumatel, MetroFibre, and Frogfoot decimated Telkom’s broadband subscriber base.
Telkom failed to leverage its extensive advantage in trenched telecoms infrastructure to quickly modernise its network as fibre optic cable became the standard for fixed broadband Internet.
Financial analysts also criticised the company for frequently switching its capital expenditure focus between its fixed and mobile businesses.
By September 2024, Telkom’s broadband subscriber base had fallen to 553,312 customers. That number has steadily climbed every quarter since.
By March 2026, the figure stood at 611,369. While still far off its peak fixed broadband customer count in 2016, Openserve also has many more third-party broadband customers.
Telkom’s “broadband customers” figure refers to those who are customers with its own Internet service provider (ISP) business.
The Telkom that ruled the South African Internet up to 2016 was a largely monopolistic creature, with many users locked to its infrastructure and using its ISP out of convenience or for bundling advantages.
Nowadays, Telkom must compete for its customers just like everyone else, and its users are retained based on its ability to provide good service and good value.
Closing in on one million homes with fibre
In the last decade, thousands more customers joined Openserve’s fibre network through third-party ISPs such as Afrihost, Mweb, Webafrica, Supersonic, and Vox.
Openserve had 817,540 homes connected on its FTTH network by March 2026. That was around 123,000 more than a year earlier, reflecting growth of 18%.
While several major FNOs slowed their rollouts between 2022 and 2025, Openserve continued to expand its network at speed.
By the end of March 2026, it had passed 1.53 million homes with fibre, up by nearly 12% from March 2025.
Since taking the reins at Telkom in 2022, chief executive officer Serame Taukobong has focused heavily on maximising revenue from the company’s core businesses.
That included realising the potential of its extensive backhaul network. The infrastructure spans over 180,000km across South Africa, which is nine times larger than its nearest competitor’s network.
Taukobong was appointed CEO designate in August 2021. In Telkom’s financial year ending March 2022, its fibre expenditure increased by 126% year-on-year to R2.38 billion
Under his predecessor, Sipho Maseko, Telkom spent an average of R1.44 billion per year on fibre capex between its 2015 and 2022 financial years.
In his four years at the helm, Taukobong has overseen an average annual fibre expenditure of R1.59 billion, a 10.4% increase.
While Telkom has continued to invest substantially in its mobile network infrastructure, it sold its Swiftnet mast and tower business for R6.75 billion in 2024.
The company originally announced a plan to spin out Swiftnet into its own entity in September 2021, before deciding to sell it in 2023.
The sale was part of Telkom’s value-unlock strategy to streamline its operations, free cash flow, and focus on its core telecommunications infrastructure while paying off its debt.
The move has given the company the flexibility to continue core upgrades and aggressively expand its FTTH network, without incurring high levels of debt or relying on external funding.
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