JSE-listed Telkom on Tuesday posted growth across the board during the first quarter of the 2026 financial year, building on the momentum of the previous year’s results.

Growth was offset, however, by a weak performance from BCX.

During the quarter ended June 30, group earnings before interest, taxes, depreciation and amortisation (Ebitda) increased 6.5% to R2.8-billion, while revenue increased 1.1% to R10.82-billion, with data revenue, accounting for 60% of group revenue, rising 7.1%.

“We are pleased to report solid results for the first quarter, building on last year's strong results. Our data-led strategy continues to be the competitive advantage enabling us to sustain our momentum into the 2026 financial year and the increased contribution by mobile data and fibre-based services to total revenue is consistent with the assumptions supporting our medium-term objectives,” said Telkom Group CEO Serame Taukobong.

“Excellent Telkom results were disappointingly affected by the BCX performance, with BCX revenue declining by 8.3% while its annuity-based revenue remained flat. Aligned with our focus on delivering results, a specialised team is in place to continue with its work to effect a faster BCX turnaround.”

Telkom Consumer's Ebitda increased 18.5% to R1.42-billion, while mobile Ebitda increased 5.8% to R1.63-billion. Total Telkom Consumer revenue increased 5.5% to R6.95-billion, with mobile service revenue increasing by 7.8% to R5.39-billion and mobile data revenue increasing 9.6% to R4.19-billion.

The total subscriber base grew by 12.3% to 23.8-million, with mobile data subscribers expanding by 27.5% to 17.2-million, comprising 72.1% of the total subscriber base.

Openserve’s Ebitda edged up 0.9% to R1.03-billion, while revenue climbed 2.8% to R3.1-billion, supported by an 11.3% increase in fibre data revenue to R2.5-billion.

Fibre-related revenue now contributes 86% of Telkom’s operating revenue.

Meanwhile, during the quarter under review, Openserve passed 35 997 homes, bringing the total to 1.4-million homes, equating to growth of 12.6%.

The company connected 28 707 homes during the three months to June, with 723 337 homes now connected, with the connectivity rate improving to 51.1%.

BCX Ebitda contracted 25.3% to R189-million during the quarter under revenue.

Revenue declined 8.3%, with Information Technology (IT) revenue falling 5.6% to R1.69-billion and Converged Communications revenue declining 11.9% to R1.22-billion.

“The performance of BCX disappointed. The deliberate moderation of hardware and software sales, together with the managed migration of legacy services to fibre solutions, saw revenue decline by 8.3%. Even excluding these deliberate portfolio decisions, annuity-based revenue remained flat,” Taukobong said.

“We are focused on our transformation to higher-margin, recurring IT and fibre-led services.”

Fibre-related data revenue grew 6.8% to 89% of data services, while voice remained stable, which partially mitigated lower revenue within the Converged Communications business, owing to the deliberate migration.

In the IT business, the reduction of exposure in hardware and software sales, which declined 9.8%, or R113-million, is aligned with Telkom’s shift to scalable, service-based revenue.

“Despite IT services revenue decreasing by 3.1%, reflecting resilient client demand in a tough environment, we are gaining share in high-value segments. Traditional and network cybersecurity grew 32%, municipal solutions 7% and Internet of Things by 6%.