ADSL on its last legs in South Africa

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Partially state-owned telecommunications company Telkom announced in its financial results for the year ending 31 March 2025 that its ADSL subscribers had more than halved to under 30,000.

According to the company’s operational data, ADSL lines decreased from 64,959 in March 2024 to 29,770.

This 54.2% decline highlights that the legacy broadband technology is slowly approaching the end of the road.

Telkom’s ADSL business peaked at the end of March 2016 with 1.01 million subscribers — two years after fibre upstart Vumatel broke ground in Parkhurst.

What followed was a sharp decline in Telkom ADSL subscribers. Customers connected to its copper networks decreased by more than 500,000 over the next four years.

This was partly driven by Telkom itself, which began actively switching off its copper network in some neighbourhoods.

If it did not have fibre in the area, it would offer a “fixed line lookalike” wireless service that ran over its cellular towers.

By June 2021, the number of ADSL connections had nearly halved again to 264,000. However, as its ADSL subscribers declined, Telkom saw significant growth in its fibre business.

This growth continued over the past year, with subscribers increasing by from 489,994 to 535,532, a 9.2% change from the figures reported in 2024.

This brings the total fixed-line subscribers, comprising fibre and ADSL customers, to 565,322, a 1.9% year-on-year (YoY) increase.

This is the first time this number has increased in an annual report since ADSL subscribers peaked in 2016. At that time, total fixed broadband subscribers stood at 1.02 million.

Telkom noted that its fixed broadband subscribers used 2,915 petabytes, equivalent to 2.915 million terabytes, over the reporting period, an increase of more than 600 petabytes.

Fibre homes connected, defined as homes with a fibre connection, whether active or not, increased to 694,630 by the end of March 2025, a positive 17.6% YoY change from 590,527.

This has increased significantly since 2016, when homes connected stood at 8,129.

Homes passed, the number of homes that Telkom’s fibre could serve, increased by 13.3% YoY from 1.22 million to 1.38 million.

However, while Telkom also recorded notable growth in mobile network volumes of 24.1%, it saw a drop in fixed-line traffic, from 4.09 billion minutes to 3.8 billion.

This can be attributed to the 22.2% YoY decrease in fixed access lines from 609,000 to 474,000. This number peaked in March 2000 at 5.5 million and has decreased ever since.

The chart below shows the rise and fall of Telkom’s ADSL subscribers over the past two decades.

Major profit boost for Telkom

In addition to declaring its first dividend in five years, the telco reported a 299% increase in profit from R1.9 billion to R7.5 billion.

A substantial part of the increase can be attributed to the disposal of its infrastructure subsidiary Swiftnet, which it sold to Actis and Royal Bafokeng Holdings towards the end of March 2025.

Although the deal’s total value was R6.75 billion, it generated roughly R4.4 billion in profit, less than the total R5.7-billion profit jump.

Telkom Group revenues also increased by 3.3% from R42.46 billion to R43.88 billion, primarily due to strong mobile service revenue growth.

This segment generated 10.2% more revenue than the previous year, driven by a 19.5% surge in subscribers to 15.2 million.

Telkom’s fibre-related data revenue also increased by 10% due to a 5.9% increase at Openserve and a 12.7% jump at enterprise-focused BCX.

The company also generated cash of R730 million from the sale of 57 properties in its Gyro business.

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