Page 1

Telkom SA SOC Limited Registration number 1991/005476/30 ) JSE share code : TKG JSE bond code : BITEL ISIN : ZAE000044897 ( " Telkom " or " the Group " ) Trading update for the quarter ended 30 June 2021 ( " Q1 FY2022 " ) Q1 FY2022 : Group salient features Group revenue up 3.5 % year on year to R10 618 million mainly driven by the mobile business Mobile data revenue grew 11.1 % supported by growth in mobile broadband customers ● ● Mobile broadband customers up 30.9 % to 10.5 million , representing 65.6 % of active customers Active mobile customers up 36.3 % year on year to 16.1 million Fixed data connectivity revenue grew 1.2 % driven by increased demand in fixed broadband usage Fibre to the home grew by 32.2 % to 306 837 representing FTTH connectivity rate of 50.1 % Masts and Towers number of external leases increased 6.9 % year on year to 8 685 Group EBITDA up 7.3 % to R 2 751 million with EBITDA margin expansion of 0.9 ppts to 25.9 % Statement from the Group Chief Executive Officer : Sipho Maseko " Telkom published a solid set of results for the first quarter of the year in a challenging trading and economic environment . Group revenue and EBITDA grew 3.5 % and 7.3 % respectively , demonstrating recovery in topline revenue and strong profitability compared to the prior year . Our sustainable cost management continues to deliver positive results , culminating in Group EBITDA growing faster than revenue despite a salary increase of an average of 6.0 % across the Group " , says Sipho Maseko , Group Chief Executive Officer . ● ● ● ● Despite the South African economy gradually opening , customers remain under severe financial pressure due to loss of jobs , reduced income and liquidation of small businesses . We witnessed a continuing change in consumer behavior in the postpaid consumer market . As customers seek to manage their spend , we saw a reluctance to renew postpaid contracts with some customers opting to switch from postpaid to prepaid propositions . In the Enterprise segment , investment lags the economy as the country grapples with the COVID - 19 third wave with many Small and Medium Entities ( SMEs ) having to close their businesses in these challenging times . What has been encouraging is the Mobile business sustaining its growth trajectory despite a very strong prior year first quarter , with postpaid ARPU holding steady at around R220 . Our Masts and Tower portfolio continued to grow and expanded its footprint . We have also seen a recovery in the Converged Communication business in BCX with this business recording growth while the IT business remains under pressure . For the first time since the technology migration at Openserve , the number of homes connected with fibre surpassed the number of homes connected with copper . Although the overall fixed business is still declining , we noted positive recovery in the fixed voice usage and fixed data connectivity revenue compared to the prior year boosting the performance of Openserve . " This has been enabled by our ongoing capital investment and broadband led strategy which underpins the evolution of our business . Today , the new revenue streams , being mobile , IT , fibre and masts and towers contribute more than 70 % of Group revenue and remain the driver of the topline growth and the profitability of the business " , Maseko concluded .