Telkom Confirms R12 Billion Network Overhaul — Rural Coverage to Double by 2026

Telkom has greenlit a R12 billion network overhaul, the company's chief executive Nonkululeko Dlamini announced from Johannesburg on Tuesday, marking the largest single capital commitment in the South African telecom's recent history. The five-year plan targets both urban fibre expansion and rural connectivity gaps that have long frustrated customers and investors alike.

The investment breakdown

Dlamini told investors the company would direct roughly 60 percent of total capex toward fibre-to-the-home deployments in Gauteng, KwaZulu-Natal, and the Western Cape over the next 24 months. The remaining funds will go toward upgrading backend transmission infrastructure to support higher data loads. Existing copper lines in underperforming areas will be phased out entirely by the end of 2027.

The announcement came alongside Telkom's half-year results, which showed a 14 percent rise in mobile data revenue compared to the same period last year. Dlamini cited that growth as justification for the accelerated spending pace. "We are not chasing competitors," she said. "We are building for the next decade of demand."

Why the timing matters

Telkom's rival Vodacom and rival Rain have both announced aggressive 5G rollout schedules over the past 18 months. Industry data from Research ICT Africa shows that mobile broadband penetration in South Africa reached 72 percent in 2023, yet rural coverage remains uneven. An estimated 22 percent of South Africans still lack reliable access to 4G networks, according to the Independent Communications Authority of South Africa.

That gap represents both a commercial opportunity and a regulatory headache for Telkom. The company currently holds spectrum in the 700MHz and 2600MHz bands, which are ideal for wide-area coverage. Without a network capable of using that spectrum efficiently, the company risks seeing its licensed frequencies sit idle while competitors attract rural customers.

Nonkululeko Dlamini's strategy

Dlamini, who took the helm in 2022 after serving as chief financial officer, has steered Telkom away from its earlier diversification efforts into property and fintech. She has refocused the company on its core connectivity business, a direction that resonated with shareholders during Tuesday's presentation. Telkom's share price rose 3.4 percent on the Johannesburg Stock Exchange following the announcement.

The network plan includes hiring an additional 800 field technicians across all nine provinces by mid-2025. Dlamini said partnerships with international equipment vendors would be finalised within 90 days, though she declined to name the suppliers pending contract signatures. Industry sources familiar with the procurement process indicated Nokia and Huawei are the leading contenders.

Impact on consumers

For residential customers, the most visible change will be the fibre rollout. Telkom aims to pass 1.5 million additional homes by 2026, up from the current 2.2 million connected premises. That would place fibre within reach of roughly a quarter of all South African households.

Mobile users should expect improved indoor coverage in previously underserved townships around Ekurhuleni and Nelson Mandela Bay, where network congestion has been a persistent complaint. Average data speeds in upgraded areas are projected to increase by 35 to 40 percent, according to internal Telkom modelling cited by Dlamini.

Regulatory and competitive pressures

The South African government has repeatedly urged major operators to extend coverage into rural districts as a condition of spectrum licensing. ICASA has made clear that operators who fail to meet rollout obligations face penalties, including potential spectrum revocation. Telkom's new investment appears designed to pre-empt any regulatory action while positioning the company for future spectrum auctions.

Competition is intensifying. Rain, the data-focused ISP, has been expanding its fibre footprint aggressively in suburban areas, while Cell C has been exploring network-sharing arrangements to reduce costs. Vodacom, the market leader, recently committed R9 billion to network upgrades through 2025. Telkom's R12 billion commitment effectively matches that spending in absolute terms despite being a smaller operator by subscriber count.

What comes next

Telkom expects to award the first major infrastructure contracts before the end of the current quarter. Construction crews will begin work in Centurion and Durban north before expanding to other areas in the third quarter. Dlamini said quarterly progress reports will be published starting in October, with specific rollout milestones published on the company's investor relations portal.

Analysts will be watching closely for any supply chain complications, particularly given ongoing geopolitical uncertainty affecting semiconductor availability. The company has not disclosed contingency plans if vendor delivery schedules slip, a gap that some institutional investors flagged during the Q&A portion of Tuesday's presentation.

Looking ahead, the real test will be whether the R12 billion plan can arrest the steady decline in Telkom's fixed-line subscriber base while simultaneously winning new mobile customers. Dlamini has roughly three years to demonstrate results before the next spectrum auction cycle puts further pressure on all operators to justify their network investments.