Telkom Sa Soc Ltd. · JSE:TKG
Telkom Sa Soc — Investor Day (February 2025)
44 slides from Telkom Sa Soc's investor day presentation, Feb 20, 2025
Slide 1: Telkom Consumer Information Session
Telkom Consumer Information Session Seamlessly connecting our customers to a better life 20 February 2025 Internal Use Telkom Consumer Presentation 2025 1
Slide 2: Disclaimer
Disclaimer Many statements in this document and verbal statements that may be made by Telkom or officers, Directors or employees acting on Telkom’s behalf constitute or are based on forward-looking statements. All statements, other than statements of historical facts, including, among others, statem
Slide 3: Opening remarks
Opening remarks Serame Taukobong Internal Use Telkom Consumer Presentation Presentation 2025 2025 3
Slide 4: OneTelkom: Internally aligned, externally executed
OneTelkom: Internally aligned, externally executed Purpose: Seamlessly connecting our customers to a better life Fibre +180,000 km of fibre Drive capital (Fixed network) +1.3 million homes passed efficiency Mobile +7 100 4.5G integrated sites (Mobile network) +470 active 5G sites Protect & sweat rel
Slide 5: Telkom leveraging InfraCo assets for growth
Telkom leveraging InfraCo assets for growth Focused investment Delivering on our Driving growth in Driving Group in Fibre assets data-led strategy Enterprise services property efficiencies • Leadership in FTTH connectivity • 3rd largest MNO operator • Africa’s leading systems • Management of core pr
Slide 6: Telkom Consumer: Road to Digital lifestyle
Telkom Consumer: Road to Digital lifestyle Partner/invest to deliver Enrich the customer lifestyle: a strong ecosystem Enrich customer lifestyle 3 Smart home verticals e.g. digital, of consumer services Digital video, music, security through convenience (e.g. media, music, gaming, Lifestyle ecommerc
Slide 7: Digital Lifestyle – Journey of migration
Digital Lifestyle – Journey of migration Total Active Wireless Customers (‘000) 409k total voice 409 customers migrated 273 by March 2020 118 85 Migrate copper voice only customer to new FLLA default data inclusive products Sep 2018 Jul 2019 Sep 2019 Mar 2020 Broadband subscribers 212 (‘000) 194 12
Slide 8: Digital Lifestyle – Building from strength in the home
Digital Lifestyle – Building from strength in the home to “014” telco share of wallet gain Ecosystem is Future Migrate copper voice only customer to new FLLA default data inclusive products Smart Home Wearables Fintech AI Cloud Leadership in Convergence is Competitiveness Home Broadband DSL/ISP Fibr
Slide 9: Telkom Consumer Overview
Telkom Consumer Overview Lunga Siyo Internal Use Telkom Consumer Presentation 2025 9
Slide 10: Our Leadership team
Our Leadership team Lunga Siyo Simo Mkhize Gugu Mthembu Hasnain Motlekar Randall Abrahams CEO Chief Commercial Officer Chief Marketing Officer Chief Financial Officer Digital Solutions Lanyard Myakayaka Wisdom Mashika Albertus Venter Lebo Masalesa Dr. Noxolo Kubheka-Dlamini Business Performance & Hu
Slide 11: South African Telco operating context
South African Telco operating context Regulations Revenue MVNOs Beyond Connectivity Technology MTR’s, Social Service Revenue for Digital service focus innovation obligations, FY25/26E, we expect Customer Education Care new ECN Bill 2.9% SR growth for the 4.3m MFS - insurance /loans e-SIM and e-SIM 2
Slide 12: Telkom Mobile has achieved substantial growth in subscribers, revenue and profitability
2021-24 Telkom Mobile has Mobile Revenue 2018-21 CAGR: 5% R’m achieved substantial CAGR: 40% 20 791 21 617 22 583 19 623 growth in subscribers, 2015-18 15 151 revenue and profitability CAGR: 32% 10 765 7 152 5 558 4 173 3 131 2 101 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 2010 2012 2016
Slide 13: Mobile now contributes more than 50% to Group revenue
Mobile now contributes more than 50% to Group revenue FY 2020 53.9% 35.7% 27.6% Telkom Consumer Mobile revenue Telkom Consumer as % of Group as % of group as % of Group revenue EBITDA FY 2024 60.5% 52.5% 40.8% Telkom Consumer Mobile revenue Telkom Consumer as % of Group as % of group as % of Group r
Slide 14: We continue driving growth through data and value-led propositions
We continue driving growth through data and value-led propositions, leveraging our infrastructure to seamlessly connect customers How we will achieve growth Telkom Consumer unique strengths South Africa’s most loved Mobile service Fibre service Beyond Deliver best in class value mobile network reven
Slide 15: What we are focusing on
What we are Improve Business focusing Performance on Mobile and fibre growth Improve returns EBITDA growth, free cash flow, capex efficiency Create future value Beyond Connectivity and digital prepaid ecosystem Internal Use Telkom Consumer Presentation 2025 15
Slide 16: A strong prepaid offering with subscriber market share of over 20%
A strong prepaid offering with subscriber market share of over 20% Total subscriber market share Total revenue market share 50% 50% 50% 49% 49% 47% 47% 45% 44% 44% 35% 35% 35% 34% 35% 34% 34% 35% 34% 34% 21% 20% 20% 19% 18% 17% 16% 16% 16% 16% Dec_23 Mar_24 Jun_24 Sept_24 Dec_24 Dec_23 Mar_24 Jun_24
Slide 17: Telkom outperforming peers on mobile service revenue
Telkom outperforming peers on mobile service revenue SA mobile service revenue quarterly growth trends 15.0 13.0 11.0 9.0 9.5 7.0 5.0 3.0 3.0 1.0 2.4 -1.0 -3.0 Vodacom -5.0 MTN 2Q21 1Q22 4Q22 3Q23 2Q24 Telkom Source: Investec Securities Internal Use Telkom Consumer Presentation 2025 17
Slide 18: Telkom Consumer's performance accelerated by mobile growth
Telkom Consumer's performance accelerated by mobile growth - providing innovative, customer-centric high-speed broadband solutions Mobile subscribers Mobile service revenue Mobile EBITDA/EBITDA margin ‘000 Rm Rm 25% 10.0% 9.6% 46.9% 5 401 23 999 4 926 5 401 4 598 27.56% 4 926 4 598 19 737 1 763 3 01
Slide 19: Growing adjacencies beyond connectivity
Growing adjacencies beyond connectivity Airtime lending as a Insurance Airtime lending percentage of recharges (R ’million) FY2024 R300 million FY2024 R280 million Telkom remains committed to continued adoption of airtime lending, a service business segment that now 0.4 ppts -1% represents 31% of to
Slide 20: How we are building a sustainable financial framework
How we are building a sustainable financial framework Hasnain Motlekar Internal Use Telkom Consumer Presentation 2025 20
Slide 21: Financial framework underpinned by strong financial performance and strategy delivery
Financial framework underpinned by strong financial performance and strategy delivery Service revenue Margin Value-based Attractive FCF growth expansion capital allocation Mid-single-digit to slightly higher service EDITDA margin CAPEX intensity Stable free of 25% - 27% of 12% - 15% revenue growth (
Slide 22: Mobile EBITDA evolution
Mobile EBITDA evolution Growth fuelled by innovative EBITDA & margins value-accretive offerings 22.2% 27.4% 20.5% 27.2% Network costs IT optimisation Contract negotiations 5 832 5 036 4 958 4 472 Channel cost Device Customer efficiencies realignment experience FY22 FY23 FY24 FY25 Q3 Internal Use Tel
Slide 23: Our market approach & value propositions
Our market approach & value propositions Simo Mkhize Gugu Mthembu Internal Use Telkom Consumer Presentation 2025 23
Slide 24: Our operating model shift has brought us closer to our dealers and channel partners
Our operating model shift has brought us closer to our dealers and channel partners Analyse Market Sell Serve • CVM • Segment marketing • Consumer Sales • Supply Chain • Data science • Product (P&L Owners) - Direct • Credit Management • Market segmentation • CVM & Data Science - Indirect • Customer
Slide 25: How we are winning on prepaid
How we are winning on prepaid Driving prepaid business performance through advanced data analytics, personalisation, regional play and low end 4G devices Prepaid Performance (in millions) Commercial Regionalisation Data science +7 million • Simplified CVP offering • Regional activation • Smart decis
Slide 26: How we are winning on prepaid
How we are winning on prepaid Maintained competitive pricing and better value in prepaid despite competitors closing the pricing gap 1GB Pricing trend in SA telecoms Maintained competitive pricing and better value in prepaid data Vodacom R 149 • Competitors reduced 1GB pricing from R149 to R85 (43%
Slide 27: Mo'Nice continues to be a key growth driver in our prepaid segment
Mo’Nice continues to be a key growth driver in our prepaid segment, driven by increasing adoption of personalised offers Overview Performance Focus areas More than 5 million subscribers now access personalised offers 25% year on year average increase in Data Science capability revenue performance Us
Slide 28: Driving postpaid commercial momentum with disciplined working capital focus
Driving postpaid commercial momentum with a disciplined focus on managing working capital Credit Commercial Distribution Supply Chain Management • Average device costs in • Franchise model • Vendor managed • Revised credit vetting the market have been adoption inventory solutions scorecard reduced g
Slide 29: Telkom Consumer as a responsible corporate citizen
Telkom Consumer as a responsible corporate citizen Internal Use Telkom Consumer Presentation 2025 29
Slide 30: Group purpose and brand: We are a challenger brand
Group purpose To seamlessly connect our customers to a better life CSB purpose translation To build a connected and tech-empowered South Africa so everyone can thrive and reach their full potential Brand promise With technology and superior connectivity, the impossible We are a challenger brand is t
Slide 31: Social Impact | Value Leadership
Social Impact | Value Leadership Number of Top Value Plan Awards over one year (Prepaid) 8 7 7 7 7 6 6 5 5 4 4 4 4 4 Telkom has led all 3 3 3 4 Cell C operators in total 2 2 2 MTN awards since 1 Telkom Vodacom September 2018 0 0 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Telkom earned 15 Telkom won thr
Slide 32: Possible begins on the Best Value Network
Social Impact | Value Leadership continues Number of Top Value Plan Awards over one year (Postpaid) 25 21 20 19 15 15 15 15 10 Cell C 6 6 MTN 5 5 5 3 4 Telkom 3 2 0 0 0 0 0 0 Vodacom Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 FlexOn continues to be strong in the light and moderate profiles with a good b
Slide 33: Consumer Segments | Market-level Value Propositions
Consumer Segments| Market-level Value Propositions Offer & Price range Fibre LTE Mobile Bundles & VAS Content (Fibre & LTE) Fixed Mobile Wealthy 50Mbps - 500Mbps 240GB - 2TB Core and Endless Fibre LTE Capped 180/2TB Infinite plans LTE Bundles Amazon Prime & (50Mbps to 500Mbps) LTE Unlimited 10/20 Meg
Slide 34: Customer Experience | Monitoring
Customer Experience | Monitoring Telkom Trended Net Sentiment Apr - Jul - Oct - Jan - Apr - Jul - Oct - Jan - Apr - Jul - Oct - Jan - Apr - Jul - Oct - Jan - Apr - Jul - Oct - Jan - Apr - Jul - Oct - Jan - Apr - Jul - Oct - Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
Slide 35: Social Impact | Sponsorships
Social Impact | Sponsorships Addressing gaps in empowerment of women and people with physical impairments Internal Use Telkom Consumer Presentation 2025 35
Slide 36: How we build our data-led network
How we build our data-led network Lebo Masalesa Internal Use Telkom Consumer Presentation 2025 36
Slide 37: Mobile Network Evolution
Mobile Network Evolution Industry Trends Legacy Prominent (High penetration) New (Low penetration) Future 2G & 3G 4G 4.5G 5G 5.5G 6G LTE 2T2R LTE CA/4T4R NR + MM 10Gbps prophecy Telkom Journey 2010 2012 2016 2018 2019 2020 2021 2022/ 2023 Start 2G&3G 2.3G TDD LTE 4.5G CA MM in 4G 3CC VoLTE 5G 1st EN
Slide 38: LTE footprint that covers 83% of the population
LTE footprint that covers 83% of the population 83% Network Coverage 85.24 3G Population Covered 85.12 Population coverage 83.15 LTE 82.71 2024 2023 80 81 82 83 84 85 86 Drivers of network coverage 93% Devices supporting 74% 4G Sites with and capacity expansion user average • Roaming hotspots throug
Slide 39: How we capacitate the network to carry traffic growth
How we capacitate the network to carry traffic growth Spectrum refarming Carrier addition Massive MIMO New technology Site densification 1800Mhz: 2100Mhz: 2300Mhz: 2300Mhz 5G: 50Mhz New site 24Mhz 30Mhz 60Mhz Capacity gain 33% capacity gain 200%+ capacity gain 200%+ capacity gain 100% capacity gain
Slide 40: Smart Capital Deployment - reduced roaming costs
Smart Capital Deployment - reduced roaming costs Roaming costs decreased 30%, while data traffic grew by 22% Broadband subscribers Broadband traffic Mobile sites integrated Roaming costs ‘000 Petabytes % of service revenue 25.7% 22.0% 1.8% 2.6 ppts 14 947 7 863 452 8.8% 12 743 7 721 11 487 7.3% 371
Slide 41: Our network expansion strategy prioritizes coverage and capacity
Our network expansion strategy prioritizes enhancing coverage (Low Band) and increasing capacity (MIMO) across our sites. 3G site count 4G site count Low Band site count Massive MIMO site count 1.7% 2% 20% 115% 4 280 7 863 7 854 1349 3 561 7 721 3 138 7 711 7 463 627 7 669 346 FY23 FY24 FY25 FY23 FY
Slide 42: Key messages
Key messages Internal Use Telkom Consumer Presentation 2025 42
Slide 43: Key messages
Key messages We remain committed to our data-led market positioning 1 Achieve 20-25% mobile service revenue market share 2 Continue to drive fibre growth with enhanced focus on NLI 3-5 and Prepaid propositions 3 Create a system of advantage to develop a competitive advantage that is difficult for ri
Slide 44: Thank you
Thank you Internal Use Telkom Consumer Presentation 2025 44