Telkom says it has so far managed to save R87.5 million, by curbing procurement costs and promoting a more “conscious and effective Telkom culture”.
In an email sent to employees, Telkom chief procurement officer, Ian Russell, noted that in the 2015 financial year so far, the group managed to realise operating expenditure savings of R68 million and capital expenditure savings of R19.5 million.
The telco said it has identified 71 initiatives to curb possible wasteful spending at the company.
In April, Telkom CEO Sipho Maseko said that the group was looking to cut R1 billion in costs per year for the next five years.
The cost-cutting measures also include the retrenchment of thousands of employees – a process which has been underway for the past few months.
Further cost-cutting measures involve the company looking at selling off property assets, and further reducing third-party costs.
Telkom’s current property portfolio consists of 23 million square metres of land and 2.2 million square metres of buildings – of which 1.7 million is owned – amounting to an annual operation bill of R2 billion.
Telkom’s current third-party cost base is R17 billion, according to Russell, which the company wants to reduce significantly over a three year period.
In its latest full year results, Telkom’s continuing turnaround strategy proved effective as the group swung back into profit after two years of full year losses.
The group reported an operating profit of R4.6 billion, from a prior loss of R11.15 billion in 2013, and a loss of R176 million in 2012.