Lunga Siyo, CEO of Telkom Consumer.
Telkom, South Africa’s third-biggest mobile operator, has set its sights on taking the competition to the Vodacom and MTN duopoly.
This was the word yesterday from Lunga Siyo, CEO of Telkom Consumer, in an interview with ITWeb after the JSE-listed telecommunications company announced its annual financial results for the year ended 31 March.
Siyo believes that backed by the power of artificial intelligence (AI) and data-driven insights to boost mobile service revenue, personalise offers and grow its subscriber base across South Africa, Telkom will mount a serious challenge to the dominance of Vodacom and MTN.
This, after the company posted stellar financial results, buoyed by the mobile business, which saw increased revenue and subscriber numbers.
Siyo’s portfolio, Telkom Consumer, increased operating revenue by 5.6% to R27.8 billion, driven by advanced data analytics, optimisation of the product portfolio and expansion of distribution channels.
External revenue from the mobile business reached R24.4 billion, an 8.3% increase, driven by 10.2% growth in mobile service revenue to R21 billion. Fibre-related data revenue surged by 15.5%, driven by a 3.4% increase in subscribers and a 12.4% uplift in average revenue per user.
The group’s mobile subscriber base expanded by 13.4% to 23.2 million, further strengthening its market position.
Competing with the ‘big boys’
With these metrics, Siyo believes Telkom, a late entrant into the mobile operator business, now has what it takes to challenge the duopoly.
“We have said in the past that if you get to 15% market share, in terms of subscribers, you will be on survival mode as a late entrant in the mobile space, but if you get to 20%, you are actually on the table.
“At 20%, you will be able to create a sustainable business and compete with the bigger boys as well. We are at 20%, growing to 21% with the extra three million subscribers that we have acquired.”
However, Siyo noted for Telkom, it’s not just about gaining market share but about acquiring customers who have the potential to recharge airtime and drive service revenue growth.
“So, we are not focused on a particular operator, but on understanding customer behaviour and creating affordable data propositions for those customers.”
According to Siyo, AI has been at the centre of driving mobile service revenue and subscribers in the past financial year.
He pointed out that the mobile gains were also realised by making sure the mobile operator keeps its average revenue per user at around R60.
“While we have been gaining market share and converting those customers into paying customers, there is a key indicator that we use to measure the business, which is called recharges – how customers are topping up their airtime on a daily basis.
“We’ve taken great pain in really understanding how customers behave by creating an AI-powered insight capability within the business that watches customer behaviour. Once customers experience our network, we then deploy what we call the ‘Mo’Nice’ proposition, where we give them affordable propositions at price points that they like,” he noted.
Telkom’s Mo’Nice proposition focuses on offering tailored data and voice bundles for mobile prepaid customers, catering to individual needs and lifestyles. It allows customers to choose bundles that best suit their usage, whether they prioritise data for streaming, calls for family, or browsing the internet.
The goal is to maximise the value customers get from their spending by providing a service that aligns with their specific needs.
“Telkom does not only focus on customers purchasing 1GB of data; we also consider those buying smaller bundles like 5MB at specific times of the day, as well as users who buy data specifically for social media use,” said Siyo.
“We cater to a wide range of customers – from entry-level to mid-tier and even high-value prepaid users – and we design pricing options that are tailored to meet the needs of each segment.”
He stated that Telkom has been innovative in how it bundles its propositions and also introduced a low-end 4G device for customers in the 2G and 3G space.
Last year, Telkom launched the Citrus L04, an entry-level Android device aimed at expanding digital access across South Africa.
Priced at R299, the phone comes pre-installed with WhatsApp (including voice and video calls), YouTube and Facebook. It has a 2 500mAh battery, providing basic yet reliable connectivity for everyday use.
“We are making use of this device to ensure those customers stay longer on the network,” Siyo said.
“Lastly, we have been implementing what we call regional penetration. In the past decade, we have largely been focused on Johannesburg, Durban and Cape Town, as a late entrant in the mobile space.
“Now, we have been going deeper into the tier two and tier three towns in specific regions where we have seen that we’ve been under-indexed in terms of market share.”
