For Serame Taukobong, taking the helm of Telkom in January 2022 was, in his words, a “snotklap of the highest order”.
On his fourth day as CEO, Taukobong was signing court papers to challenge South Africa’s telecoms regulator over a contentious spectrum auction.
On day 25, there was a surprise Special Investigating Unit (SIU) proclamation from President Cyril Ramaphosa, for investigation of allegations of maladministration and misconduct linked to a series of previous transactions, including Telkom’s disastrous R7bn loss on its Nigerian Multi-Links venture and the later disposals of iWayAfrica and Africa Online Mauritius.
The proclamation sent Telkom’s share price into freefall, wiping R3bn off the company’s value in one day. “I hadn’t even got my first pay cheque,” he later quipped.
Then came an unwelcome plot twist: rival MTN expressed interest in buying Telkom, only to get cold feet and walk away, whipsawing Telkom’s stock all over again.
As if that wasn’t enough, Taukobong soon had to break the news that Telkom’s free cash flow was a negative R2.1bn — a haemorrhage of cash inherited from the previous year.
All of this happened within his first six months. Taukobong now laughs at the memory, but at the time it wasn’t funny.
When I had to show up, I had to show up strong. But importantly, I had to show up honest
— Serame Taukobong
Hard times can reveal character. Telkom’s turbulent 2022/2023 period revealed Taukobong as a study in resilience and realism. Rather than sugar-coating the situation, he chose candour. “When I had to show up, I had to show up strong. But importantly, I had to show up honest,” he told a group of young professionals in 2025.
There was no spinning the facts: Telkom was struggling, no bonuses were coming, and painful measures lay ahead.
“Guys, it’s bad. Here are the numbers. No bonus,” he recalls telling employees bluntly. That honesty would prove crucial for maintaining trust when the company embarked on tough decisions — because things would, unbelievably, get even worse before they got better.
By mid-2023, Telkom had hit rock bottom. A long-brewing financial reckoning arrived: Telkom was forced to write down R13bn worth of legacy assets in early 2023, acknowledging that parts of the business (such as old copper lines and obsolete equipment) were not coming back.
Alongside that huge impairment, Taukobong had to retrench roughly 4,000 employees out of a workforce of about 12,000, to cut costs and save the company. Morale plunged. Negative free cash flow for the year sank even further to a dire R2.7bn. And Telkom’s stock, which had already been hammered, kept sliding.
“Since I’d started, the share price had declined by 46%,” Taukobong notes wryly of that period. Telkom, once a state monopoly and still partly government-owned, looked like another struggling former parastatal sliding towards irrelevance.
Yet this is not a story of failure, but of grit and turnaround. Even as the storms raged through 2022 and 2023, Taukobong was quietly sowing the seeds for Telkom’s renewal.
Those seeds lay in a part of the business that was still growing: mobile and data. Taukobong knew Telkom’s future did not lie in clinging to outdated strategies; it would be in embracing South Africa’s data-hungry digital present.
“In 2023, Telkom embarked on a strategy to pursue our vision of serving as the backbone of South Africa’s digital future as an InfraCo,” he told investors, using the industry shorthand for an infrastructure-led communications company. In practice, this meant doubling down on broadband — mobile as well as fibre — and monetising or shedding the assets that didn’t fit that vision.
Taukobong was perhaps uniquely suited to execute this pivot because of his own background. He has called himself a “misguided biochemist” — he trained as a chemistry major, only to realise he was a terrible fit. “I was kicked out of a lab. They thought I’d blow it up. And I ended up in marketing.”
Thus began a zigzag career that took him from Unilever to South African Breweries, to an executive role at M-Net, and eventually into telecoms with MTN. He spent 15 years with MTN, working in far-flung markets — Nigeria, Uganda, even Iran — where he earned a reputation for bold marketing campaigns and a willingness to get his hands dirty.
At MTN South Africa he led the wildly successful “Ayoba” campaign during the 2010 Fifa World Cup, earning the nickname “Mr Ayoba” in the industry.
By the time Telkom recruited him in 2018 to run its mobile division, Taukobong had accumulated a wealth of experience in how to win over telecoms customers, especially in emerging markets.
And win he did. Between 2018 and 2022, he took Telkom Mobile, a small brand nobody knew, and grew it from 5-million subscribers to 18-million in less than four years. Telkom became the country’s third-largest mobile operator, surpassing Cell C and firmly ensconcing Telkom as a player in wireless.
Ironically, the moment of Taukobong’s triumph — stepping up to lead the whole company — coincided with the onslaught of crises that nearly sank the ship. By early 2022 he was holding on for dear life as Telkom’s share price and reputation were battered by the legal tussle over spectrum, the SIU probe and the aborted merger talks with MTN. It was a classic case of “the storm before the rainbow”, as Taukobong would later frame it.
But that storm, however brutal, steeled his resolve to make changes. If Telkom was going to survive, it would have to follow the playbook that worked in mobile: focus on data, offer services people wanted and shed any dead weight that might be dragging the company down.
The strategic shift Telkom undertook under Taukobong can be summed up in one phrase: data-led. In an industry where voice-calling had long been the cash cow, consumer behaviour was now decisively shifting to data — streaming, social media, WhatsApp, Zoom.
Traditional voice revenue was shrinking across all operators. Telkom’s competitors, Vodacom and MTN, still had material voice income, which was slowing their growth. Taukobong saw an opportunity to leapfrog. Telkom would orientate itself entirely around data services, even if that meant cannibalising its own legacy voice business.
It wanted its subscribers to use WhatsApp and wi-fi calling instead of old-fashioned phone calls, if they bought their data bundles from Telkom.
Executing this vision required hard choices and bold investments. One major move was refocusing Telkom’s mobile offerings squarely on the mass market data customer — especially prepaid users in underserved areas.
Prepaid subscribers form the backbone of Africa’s mobile market. These are cost-conscious consumers who will jump to whichever provider gives them the best value. Taukobong’s Telkom leant into that.
The company became known for aggressive data promotions: big bundles of gigabytes at prices that undercut Vodacom and MTN
The company became known for aggressive data promotions: big bundles of gigabytes at prices that undercut Vodacom and MTN. Telkom’s pricing was so competitive that for years it offered the lowest effective data rates in the market, attracting millions of budget-savvy customers. Even when prices were increased in 2025, Telkom was mindful to keep its advantage where it mattered most — in its cheapest high-volume bundles.
As Taukobong explained, price increases “have not actually touched where Telkom Mobile remains quite competitive, which is at your lower-end high-volume bundles”. In those low-end data deals — the “sweet spot” for price-sensitive users — Telkom offered deals where rivals often had no comparable products. The result was an ongoing surge in subscribers.
“Prepaid subscribers continued to grow robustly,” Taukobong reported in 2025. By the first quarter of 2026, Telkom had added about 650,000 new mobile data customers in just three months, while keeping average revenue per user steady — an exceptional performance compared to competitors. It’s not hyperbole to say that Telkom is setting the pace in South Africa’s most competitive telecoms segment.
Taukobong’s bet on data wasn’t limited to mobile, though. He also turned to Openserve, Telkom’s wholesale infrastructure connectivity provider, to pivot it towards the future.
Openserve is the unit that operates Telkom’s fixed-line infrastructure — the legacy copper telephone lines, as well as newer fibreoptic cables that run to homes and businesses. Copper-line usage (old landline telephones and ADSL internet) has been inexorably declining, a major drag on Telkom’s performance for years.
The solution: replace copper with fibre as quickly as possible. Under the new strategy, Telkom accelerated the rollout of fibre-to-the-home and fibre-to-the-business, leveraging Openserve’s scale. By 2025, the results were clear: fibre broadband was booming.
Openserve’s fibre-related data revenue grew by double digits year on year in the most recent reporting period, and fibre now contributes a full 86% of Openserve’s operating revenue — essentially becoming the core of Telkom’s fixed business.
Despite years of overall decline in fixed-line, Openserve managed to keep revenue flat in financial 2025, an important signal that the rot had stopped and growth was beckoning.
By the first quarter of financial 2026, Openserve had connected about 29,000 new fibre customers in just three months (connecting about 80% of the new homes passed with fibre in that quarter), indicating strong demand, and managed to increase overall revenue by 2.8%.
Of course, strategy alone doesn’t pay the bills. Cold, hard financial engineering was needed too. During the lean years, Telkom’s balance sheet had become strained, and investors were worried about rising debt. Here, Taukobong finally delivered on a long-standing Telkom objective: monetising its portfolio of cell towers — housed in subsidiary Swiftnet — to unlock cash and reduce debt.
The process took some time, but by 2023 Telkom had found a buyer and struck a deal. The Swiftnet towers were sold for R6.6bn in cash, and the transaction was closed within the promised timeline. This was a significant injection of capital for a company of Telkom’s size, equivalent to roughly 15% of its annual revenue.
Taukobong used the windfall wisely. The money went towards paying down debt and shoring up liquidity. By the end of 2025, Telkom’s net debt-to-ebitda ratio had dropped to just 0.6, the lowest leverage level among South Africa’s major telecoms companies. This lower debt not only reduced interest costs, freeing up cash, but gave Telkom breathing room to invest in its network where needed.
Smaller non-core assets, such as surplus properties in its Gyro subsidiary, were also sold, further strengthening Telkom’s balance sheet.
The cumulative impact of all these moves — the data-focused growth, the cost containment, the asset monetisation — crystallised in Telkom’s 2025 financial results. Headline earnings per share jumped to 467c, from 288c the year before, driven by a 10.2% surge in mobile service revenue and 5.9% growth in fibre-related data revenue.
More impressively, profitability leapt: Telkom’s ebitda (a key measure of operating profit) climbed by 25% year on year, and the ebitda margin expanded nearly five percentage points to 26.9%. Operational leverage had kicked in nicely, as the benefits of layoffs and efficiency programmes showed up in the numbers.
Free cash flow, which had been negative, swung into solid positive territory — R2.8bn in 2025, compared to almost nothing the year before. Telkom’s cash generation was so robust that the company found itself sitting on a healthy cash pile by mid-2025.
Thus came a hugely symbolic moment: Telkom restored its dividend. For long-suffering shareholders, this was the clearest sign yet that the turnaround was real. Back in 2020, Telkom’s board had suspended dividends entirely, citing the need to conserve cash for investments (and indeed, no dividend was paid for four years).
Now, with profits rebounding and debt low, management felt confident enough to resume payouts — and didn’t hold back. In June 2025, Telkom declared not only an ordinary dividend of 163c a share, but also a special dividend of 98c, totalling 261c a share to be returned to investors. Telkom’s stock promptly jumped, rising nearly 8% on the day of the results announcement.
After two years of brutal decline, investor sentiment had swung back to optimism, with Telkom no longer seen as a sinking ship, but as a revitalised contender in the telecoms market.
Group data revenue now makes up nearly 60% of total revenue — evidence of a fundamentally reshaped revenue mix. Telkom’s mobile customer base, once the smallest in the country, is now second only to the duopoly of Vodacom and MTN and growing faster than both.
Its fibre network, via Openserve, is one of the largest in South Africa, passing hundreds of thousands of homes and providing the backbone for not just Telkom’s own retail customers but also other internet providers that lease Openserve’s lines. In effect, Telkom under Taukobong has repositioned itself from a legacy telecoms company playing defence into a forward-looking broadband provider on the offensive. The company even upgraded its growth outlook, projecting mid-single-digit revenue growth in the coming years — a confident step up from the low-growth expectations it had before.
Of course, insiders in the telecoms industry have long recognised the underlying quality of Telkom’s assets — underscored by MTN’s aborted takeover bid in 2022 — and whispers of renewed interest refuse to fade. The logic for a deal has only grown stronger.
With Vodacom now holding a stake in Maziv, the parent company of Vumatel and Dark Fibre Africa, the competitive landscape has shifted dramatically. Owning Telkom, and by extension its prized Openserve fibre network, would give MTN a powerful foothold in fixed broadband, an area where it has historically lagged.
MTN’s CEO ruled out an outright Telkom acquisition for now but didn’t close the door on future possibilities
— Richard Cheesman
Richard Cheesman, whose Urquhart Partners recently rolled out a new “Special Situations” hedge fund, believes such a move could still be an option. As he puts it: “MTN’s CEO ruled out an outright Telkom acquisition for now but didn’t close the door on future possibilities. Given the long-running back and forth, another bid down the line seems plausible.”
Cheesman notes that MTN has openly hinted at a “buy or partner rather than build” approach to fibre — a clear signal that it may prefer acquisition to starting from scratch. Yet any deal would face steep regulatory and political hurdles. The South African government still owns 40.5% of Telkom directly, with 10.25% held by the Public Investment Corp, making any loss of control politically sensitive.
Ironically, Telkom itself may be better positioned today as a potential acquirer rather than prey. With its debt at record lows and its cash flow rebounding, some analysts have floated the idea that Telkom could make a play for Cell C, the country’s struggling fourth operator, whose market share has eroded sharply even as it eyes a public listing.
The rationale is straightforward: both companies compete in the price-sensitive prepaid segment, and a merger could create a stronger third force to challenge the MTN-Vodacom duopoly.
Cheesman sees merit in that scenario too. “There are complications, but a merger is plausible,” he says. “Telkom previously approached Cell C in 2019, and while a deal today would likely come at a higher price, it should be operationally simpler to execute. Valuation is the most likely sticking point, but the strategic rationale is compelling. Regulators would also be inclined to view a stronger third competitor in the market favourably.”
For now, Taukobong has stayed tight-lipped on any potential corporate action, preferring to focus on execution rather than speculation. On this front, he remains characteristically measured.
“Our 2025 full-year results demonstrate that the competent execution of our data-led strategy is meeting and, in some cases, exceeding expectations,” he stated calmly on the analyst call. But there is no mistaking the pride behind the numbers. “We have good reason to be proud of the results — and are quietly confident about the future,” Taukobong said, noting the “wave of momentum”.
Indeed, Telkom heads into 2026 with cautious optimism. Challenges remain, of course: the telecoms sector is fiercely competitive, economic conditions in South Africa are tough, and technology is ever evolving. Telkom’s smaller IT services subsidiary, BCX, has underperformed and needs attention (Taukobong has a task team on it). And rivals will surely respond. MTN and Vodacom have underperformed in South Africa as voice revenue declines and prepaid market share proves harder to defend.
As Taukobong says, you have to go through the storms to reach the rainbow. After a harrowing few years, Telkom’s rainbow is now coming into view.
Investors who stuck with the stock through the squalls have been rewarded with a reinstated dividend and a rebounding share price. More importantly, Telkom has regained its narrative — from a struggling ex-monopoly to an innovator focused on data connectivity for the masses.
It’s a strategic turnaround that few thought possible during the darkest days of 2022, but one that Taukobong and his team made a reality, one hard decision at a time. In doing so, Telkom now offers a powerful lesson to other embattled state-linked companies: that with strong leadership, clear strategy, and commercial discipline, even the most lumbering parastatal can find its way back to relevance.
