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TELKOM SA SOC LIMITED - Group Interim Results for the six months ended 30 September 2018

Release Date: 13/11/2018 07:05
Code(s): TKG TL20 TL24 TL25 TL28 TL26 TL22 TL23 TLC06 TLC05 TL27 TL29     PDF:  
 
Wrap Text
Group Interim Results for the six months ended 30 September 2018

TELKOM SA SOC LIMITED
(incorporated in the Republic of South Africa)
Registration number 1991/005476/30
JSE share code: TKG
ISIN: ZAE000044897
JSE bond code: BITEL
("Telkom" or "the company")

GROUP INTERIM RESULTS 
for the six months ended 30 September 2018

Special note regarding forward-looking statements 
Many of the statements included in this document, as well as verbal statements that may be made by us or by officers,
directors or employees acting on our behalf, constitute or are based on forward-looking statements.

All statements, other than statements of historical facts, including, among others, statements regarding our
convergence and other strategies, future financial position and plans, objectives, capital expenditures, projected costs 
and anticipated cost savings and financing plans, as well as projected levels of growth in the communications market, are
forward-looking statements. Forward-looking statements can generally be identified by the use of terminology such as "may", 
"will", "should", "expect", "envisage", "intend", "plan", "project", "estimate", "anticipate", "believe", "hope", "can", 
"is designed to" or similar phrases, although the absence of such words does not necessarily mean that a statement is not
forward-looking. These forward-looking statements involve a number of known and unknown risks, uncertainties and other
factors that could cause our actual results and outcomes to be materially different from historical results or from any
future results expressed or implied by such forward-looking statements. Factors that could cause our actual results or
outcomes to differ materially from our expectations, include but are not limited to those risks identified in Telkom's
most recent annual report, which is available on Telkom's website at www.telkom.co.za/ir. 

We caution you not to place undue reliance on these forward-looking statements. All written and verbal forward-looking 
statements attributable to us, or persons acting on our behalf, are qualified in their entirety by these cautionary 
statements. Moreover, unless we are required by law to update these statements, we will not necessarily update any 
of these statements after the date of this document, so that they conform either to the actual results or to changes 
in our expectations.

Pro forma information
Certain information presented in these results constitutes pro forma financial information. Pro forma financial 
information is the responsibility of the board of directors and presented for illustrative purposes only. Because of 
its nature, the pro forma financial information may not fairly present Telkom's operating results. It has not been 
audited or reviewed or otherwise reported on by our external joint auditors.
 
Voluntary early retirement packages (VERP) and voluntary severance package (VSP) costs of R282 million and
the related tax impact of R80 million (the pro forma adjustments), which was effected and accounted for in the
interim period ended 30 September 2018, constitutes pro forma financial information to the extent that it is
not extracted from the segment disclosure included in the reviewed condensed consolidated interim financial
statements for the six months ended 30 September 2018. This pro forma financial information has been presented 
to eliminate the impact of the pro forma adjustments from the consolidated financial results to achieve a
comparable analysis year on year. The pro forma adjustments have been calculated in terms of the group accounting
policies disclosed in the consolidated financial statements for the year ended 31 March 2018, except for the
changes in accounting policies as a result of the adoption of the accounting pronouncements effective   
1 January 2018.
 
The joint independent auditors' review report does not report on all the information contained in this
announcement/financial results.
 
Shareholders are therefore advised that in order to obtain a full understanding of the nature of the joint independent
auditors' engagement they should obtain a copy of the joint independent auditors' review report together with the
accompanying financial information from Telkom's registered office.

The information contained in this document is also available on Telkom's investor relations website
www.telkom.co.za/ir. 

Telkom SA SOC Limited is listed on the JSE Limited. Information may be accessed on Reuters under the symbol TKGJ.J and
on Bloomberg under the symbol TKG. SJ. Information contained on Reuters and Bloomberg is provided by a third party and
is not incorporated by reference herein. Telkom has not approved or verified such information and does not accept any
liability for the accuracy of such information.

Key indicators

Operating revenue up 5.2%                   Net operating revenue up 4.0%     
H1 2019: 20 847                             H1 2019: 16 386               
H1 2018: 19 818                             H1 2018: 15 760               
R'million                                   R'million                     
                                           
Mobile service revenue up 53.8%             Fixed service revenue down 7.0%     
H1 2019: 3 579                              H1 2019: 10 755               
H1 2018: 2 327                              H1 2018: 11 570               
R'million                                   R'million                   

EBITDA(A) up 2.9%                          Information technology revenue up 3.3%     
H1 2019: 5 320                              H1 2019: 3 774               
H1 2018: 5 170                              H1 2018: 3 652               
R'million                                   R'million                     

HEPS down 3.3%                              Adjusted HEPS(B) up 10.3%            
H1 2019: 288.0                              H1 2019: 328.6                 
H1 2018: 297.8                              H1 2018: 310.9                 
Cents per share                             Cents per share                       

Capital expenditure down 17.6%              Free cash flow up 118.6%     
H1 2019: 3 276                              H1 2019: 179               
H1 2018: 3 974                              H1 2018: (963)               
R'million                                   R'million                     

(A) The EBITDA balance referred to above includes the significant financing component of R75 million 
    and R66 million in the prior period recognised in accordance with IFRS 15 Revenue from contracts 
    with customers. The significant financing component is included in operating revenue as a separate 
    component of revenue. Excludes a once-off impact of R282 million relating to voluntary early 
    retirement package (VERP) and voluntary severance package (VSP) costs.
(B) Excluding the impact of VERP and VSP costs of R282 million and related tax impact of R80 million.

Report structure 
The Telkom group consists of Openserve, Telkom Consumer, BCX and Other. "Other" includes Yellow Pages (known as
Trudon), Gyro, VS Gaming and Corporate Centre.

Openserve is South Africa's leading wholesale infrastructure connectivity provider with the largest open access
network across South Africa. 

Telkom Consumer is South Africa's largest fixed-broadband provider, internet service provider and, together with its
mobile network, a converged communications provider.

BCX is a leading technology company that provides ICT solutions and an integrated portfolio of technology solutions
across South Africa.

Gyro is a turnkey solutions provider responsible for managing the masts and towers, property development and property
management services on behalf of the group.

Yellow Pages is a local advertising and marketing company that provides services and digital solutions to local
businesses. Yellow Pages' business units operate in South Africa and Namibia. 

Results from operations
Certain financial information presented in this results announcement constitutes pro forma financial
information in terms of the JSE Listings Requirements. The pro forma financial information has been presented to
assist a user to analyse the underlying performance of the business. The applicable criteria on the basis of which
this pro forma financial information has been reported as adjusted and is prepared as set out below.
 
                                           Reported                          Adjusted     
                                          September                         September    
                                               2018       Adjustment          2018(B)    
                                                 Rm               Rm               Rm    
Operating expenses                           11 540             (282)          11 258    
Employee expenses                             5 569             (282)           5 287    
EBITDA                                        5 038              282            5 320    
Operating profit                              2 236              282            2 518    
Taxation                                        494               80              574    
Profit for the period                         1 419              202            1 621    
                                                                                         
Basic earnings per share (cents)              276.0                             316.6    
Headline earnings per share (cents)           288.0                             328.6    
(B) Excluding the impact of VERP and VSP costs of R282 million and the related tax impact of R80 million.

The September 2017 comparative financial information has been restated as a result of a prior period
adjustment relating to the adoption of IFRS 15 Revenue from contracts with customers. IFRS 9 Financial 
instruments was adopted without restating comparative financial information. The IFRS 9 adjustment arising 
from the implementation of the expected credit loss model is therefore not reflected in the restated statement 
of financial position as at 1 April 2017 and 31 March 2018 respectively, but is recognised as an adjustment 
to the opening balance of retained earnings as at 1 April 2018. 

The group adjusted profit after tax(B) remained flat at R1 621 million (September 2017: R1 628 million) 
mainly attributable to a 2.9 percent(A) increase on earnings before interest, taxation, depreciation and 
amortisation (EBITDA), mainly driven by a 4.0 percent increase in net revenue offset by higher selling, 
general and administrative (S,G&A) costs. Adjusted profit for the period was further impacted by a 
5.3 percent increase in depreciation and a 25.9 percent increase in finance charges and fair value 
movements resulting in a 10.3 percent increase in adjusted headline earnings per share (HEPS). Including 
the VERP and VSP costs, profit for the period declined 12.8 percent to R1 419 million and HEPS reduced 
by 3.3 percent to 288.0 cents.  


OVERVIEW OF OUR BUSINESS

Pretoria, South Africa - 13 November 2018, Telkom SA SOC Limited (JSE: TKG) announced group results for the 
six months ended 30 September 2018. 

Message from group chief executive officer:
Sipho Maseko

Telkom delivered satisfactory performance with operating revenue and EBITDA growth of 5.2 percent and 
2.9 percent(A) respectively, as our investment strategy bears fruit. This is despite a challenging operating
environment, where the country slipped into a technical recession while the consumer remained under pressure 
from increases in VAT, fuel prices and a weaker currency.
 
The mobile business was a growth driver with an impressive service revenue growth of 53.8 percent to R3.6 billion 
supported by strong customer growth of 50.0 percent to 6.5 million, with a blended average revenue per user 
(ARPU) of R104, as our affordable data-led products and broadband product propositions continue to resonate 
well with our customers. The accelerated performance was underpinned by increased capital expenditure and 
increased store footprint. Openserve and Gyro also contributed positively to the group. Openserve marginally 
increased its revenue, despite the decline in traditional revenue, while Gyro continued to grow external 
revenue and the mast and tower portfolio tenancy ratio. 

Notwithstanding the satisfactory performance, we felt the negative impact of the weak economic environment
on our enterprise business as BCX, which serves all sectors of the economy, continues to be under pressure due
to the tough economic environment. In addition to the weak economy, BCX's performance continues to be impacted
by the decline in voice revenue. While fixed voice revenue declined by 12.4 percent and fixed data revenue
was flat due to the accelerated decline in traditional products, I am pleased that the new revenue streams are
compensating for the decline in our traditional revenue streams albeit at a lower margin. The declining
traditional revenue is at a higher margin than the new revenue streams and our focus is to stimulate data traffic
growth to preserve the overall margin. Our ongoing investment in new revenue streams has enabled the group to grow
revenue in evolving technology, offsetting the shrinkage in traditional revenue.  

Our capital investment of R3.3 billion, with a capex to revenue ratio of 15.7 percent, was at the lower end
of our guidance. Mobile and fibre remain key capex focus areas with impressive returns in mobile service 
revenue. The investment in fibre to the home was rationalised in the period as we continue to focus on 
areas which show a propensity for higher connectivity rates. Our fibre to the home connectivity rate has 
improved to 35.6 percent, when compared to 24.5 percent in the prior year. We expect our capex to revenue ratio
to be at the top end of our guidance by the end of the financial year, as we continue to invest in our new 
revenue streams. Our core and backhaul networks are largely modernised, and we are completing the upgrade 
of our access network with multiple technologies as customers become more technology agnostic.

Our investment in new technologies to drive future revenue streams necessitates the evolution of our skills
base and the acquisition of various capabilities within our organisation. Our focus remains on creating
efficiency and effectiveness in the context of growing the business and achieving operational excellence through 
human capital investments. We continue working on understanding the leadership and operational capability sets 
required to drive performance. This may include the reorganisation of functions, identification of skill gaps 
and, in certain instances, possible redundancies. Where we have identified gaps, we continue to be deliberate 
about the process to close out and generate value, while creating the necessary diversity among our teams. 
We continue to invest in talent within our organisation to retain key skills and ensure our future 
competitiveness.

Sipho Maseko
Group chief executive officer

(A) The EBITDA balance referred to above includes the significant financing component of R75 million and 
    R66 million in the prior period recognised in accordance with IFRS 15 Revenue from contracts with 
    customers. The significant financing component is included in operating revenue as a separate 
    component of revenue. Excludes a once-off impact of R282 million relating to voluntary early 
    retirement package (VERP) and voluntary severance package (VSP) costs.

Overview of our business
Financial capital

Key salient features 
- Group operating revenue(1) up 5.2 percent to R20.8 billion
- EBITDA(A) up 2.9 percent to R5.3 billion 
- EBITDA margin(A) of 25.5 percent
- Capex of R3.3 billion with capex to revenue ratio of 15.7 percent
- Free cash flow up 118.6 percent to R179 billion
- HEPS down 3.3 percent to 288.0 cents 
- Adjusted HEPS(B) up 10.3 percent to 328.6 cents
- Interim dividend of 112 cents, down 5.1 percent from 118 cents

Financial information summary
                                                   September      September                
                                                        2018           2017                
                                                          Rm             Rm           %    
Gross operating revenue(1)                            20 847         19 818         5.2    
EBITDA(A)                                              5 320          5 170         2.9    
EBITDA margin (%)(A)                                    25.5           26.1        (0.6)   
Capital expenditure                                    3 276          3 974        17.6    
Free cash flow                                           179           (963)      118.6    
Net debt                                               7 829          6 714        16.6    
Headline earnings per share (cents)                    288.0          297.8        (3.3)   
Adjusted headline earnings per share (cents)(B)        328.6          297.8        10.3    
                                                                                           
Effective tax rate (%)(B)                               26.2           26.7                
Capex to revenue (%)                                    15.7           20.1                
Net debt to EBITDA (times)(A)                            0.7            0.7                
Return on invested capital (%)(A)                       10.6           11.4                
(1) The adoption of IFRS 15 resulted in a marginal reduction in revenue of R79 million in the current period
    (H1 Sept 2017: R41 million). The implementation of IFRS 15 also highlighted a prior period error of 
    R250 million relating to the recognition of Mobile CPE revenue to dealer stores. The impact on 
    EBITDA is neutral. 
(A) The EBITDA balance referred to above includes the significant financing component of 75 million and 
    R66 million in the prior period recognised in accordance with IFRS 15 Revenue from contracts with 
    customers. The significant financing component is included in operating revenue as a separate 
    component of revenue. Excludes a once-off impact of R282 million relating to voluntary early 
    retirement package (VERP) and voluntary severance package (VSP) costs.
(B) Excluding the impact of VERP and VSP costs of R282 million and related tax impact of R80 million.

Group revenue(1) growth driven by the mobile business   
Group revenue increased 5.2 percent to R20.8 billion, mainly driven by a 53.8 percent increase in mobile 
service revenue. Fixed data and information technology revenues also contributed positively to the revenue. 
Fixed voice revenue declined 12.4 percent as customers migrate to newer technologies. Underpinning our 
revenue growth was ongoing capital investment in key growth areas. Our new revenue streams continue to 
grow albeit at a lower margin. This attests to the success of our investment strategy. 

Group EBITDA(A) growth despite costs inflation
Group EBITDA grew 2.9 percent to R5.3 billion(A) with an EBITDA margin of 25.5 percent(A) benefitting from 
the growth in revenue and containment of operating costs below inflation. Direct expenses grew at a rate 
faster than revenue growth due to strong customer growth which resulted in higher acquisition costs. 
Our EBITDA margin remains relatively flat compared to the prior year. The change in revenue mix as we 
evolve from traditional revenue to new revenue streams places pressure on EBITDA margin, as the declining
traditional revenue carries a higher margin compared to the new revenue streams. This requires a larger 
uptake to preserve overall margins.

Group HEPS reflects underlying performance 
Reported HEPS decreased 3.3 percent to 288.0 cents per share mainly due to voluntary early retirement 
package (VERP) and voluntary severance package (VSP) costs in the current period of R282 million and the 
related tax impact of R80 million. The underlying performance also improved.

Adjusted HEPS, excluding the impact of VERP and VSP costs, increased by 10.3 percent to 328.6 cents(B). 
Basic earnings per share increased 1.8 percent(B) to 316.6 cents(D) benefitting from EBITDA growth.

Group capital investment for future growth
Our capital investment of R3.3 billion, with a capex to revenue ratio of 15.7 percent, was at the lower 
end of our guidance. Mobile and fibre remain key capex focus areas with impressive returns in mobile 
service revenue.  

The investment in fibre to the home was rationalised during the period as we continue to focus on areas
which show a propensity for higher connectivity rates. Our fibre to the home connectivity rate has improved to
35.6 percent, when compared to 24.5 percent in the prior year. We expect our capex to revenue ratio to be in 
line with our guidance by the end of the financial year, as we continue to invest in our new revenue streams. 
Our core and backhaul networks are largely modernised, and we are completing the upgrade of our access network
with multiple technologies as customers become more technology agnostic.

Refer below for each business unit's profit and loss. The detailed performance of each business unit is
addressed in the productive capital section.

Group capital expenditure
                                                      September      September                 
                                                           2018           2017                 
                                                             Rm             Rm            %    
Fibre                                                       598          1 177        (49.2)   
Mobile                                                    1 352          1 185         14.1    
OSS/BSS programme                                           134            213        (37.1)   
Network rehabilitation/sustainment                           81            145        (44.1)   
Service on demand                                           560            622        (10.0)   
Core Network                                                383            295         29.8    
Other                                                        37             61        (39.3)    
Telkom                                                    3 145          3 698        (15.0)   
BCX                                                         106            262        (59.5)   
Other                                                                                          
Yellow Pages                                                 20              6        233.3    
Gyro                                                          5              8        (37.5)   
Total                                                     3 276          3 974        (17.6)    
                                                                                               

Strong balance sheet to fund future growth  
Despite the increase in net debt to R7 829 million in the current financial period from R6 714 million as at 
31 March 2018, we remain lowly geared with a net debt to EBITDA(A) ratio of 0.7 times(A). The group cash balances 
reduced to R2 314 million from R2 698 million as at 31 March 2018. The growth in borrowings is in line with our 
strategy to fund capital expenditure through long-term debt as we move to an optimal capital structure.  

                                                      September          March                 
                                                           2018           2018                 
                                                             Rm             Rm            %    
Bank and cash balances                                    2 314          2 698        (14.2)   
Borrowings                                              (10 143)        (9 412)         7.8    
Net debt                                                 (7 829)        (6 714)        16.6    
Net debt to EBITDA (times)(A)                                 0.7            0.6          0.1    
(A) The EBITDA balance referred to above includes the significant financing component of R75 million 
    and R66 million in the prior period recognised in accordance with IFRS 15 Revenue from contracts 
    with customers. The significant financing component is included in operating revenue as a separate 
    component of revenue. Excludes a once-off impact of R282 million relating to voluntary early 
    retirement package (VERP) and voluntary severance package (VSP) costs.

Free cash flow improved on increased cash from operations and lower capex 
Free cash flow recovered from negative R963 million in the prior period to positive R179 million. 
The improvement was mainly due to an 18.9 percent decrease in the cash paid for capital expenditure
and a 13.0 percent increase in operating free cash flow.

Free cash flow
                                                      September      September                 
                                                           2018           2017                 
                                                             Rm             Rm            %    
Cash generated from operations                            4 051          3 873          4.6    
Interest received                                           195            125         56.0    
Finance charges paid                                       (346)          (264)        31.1    
Taxation paid                                              (497)          (723)       (31.3)    
Cash generated from operations before dividend paid       3 403          3 011         13.0    
Cash paid for capital expenditure                        (3 224)        (3 974)       (18.9)    
Free cash flow                                              179           (963)       118.6    
                                                                                               
Progress against medium-term guidance
                                                      FY2019 - FY2021      H1 FY2019 Actual    
Operating revenue                                    Mid-single digit                  5.2%    
EBITDA margin(A)                                            24% - 27%                 25.5%    
Capex to revenue                                            16% - 20%                 15.7%    
Net debt to EBITDA(A)                         less than or equal to 1                   0.7    
Note: Exclude corporate action.

Segment performance
Inter-company revenue and transfer pricing was included to measure and assess performance and allocate resources. 
The comparative segment numbers have been restated to include transfer pricing.

                            Openserve      Consumer         BCX       Other      Eliminations        Group    
September 2018                     Rm            Rm          Rm          Rm                Rm           Rm    
Revenue                         8 665         9 056      10 222       1 927            (9 023)      20 847    
Fixed                           8 665         4 257       5 231          68            (6 593)      11 628    
Mobile                                        4 799                                       (88)       4 711    
Information technology                                    4 877                        (1 103)       3 774    
Other                                                       114       1 859            (1 239)         734    
Costs of contracts 
with customers                      3         1 835       1 340         184              (186)       3 176    
Payments to other operators       445           807         403           -              (370)       1 285    
Net revenue                     8 217         6 414       8 479       1 743            (8 467)      16 386    
Other income                      181           261          50         398              (698)         192    
Operating expenses(1)           5 809         6 473       7 168         973            (9 165)      11 258    
Employee expenses(1)            2 144           462       2 587         104               (10)       5 287    
Selling, general and 
administrative expenses         2 353         5 500       4 130         586            (8 682)       3 887    
Service fees                      912           219         288         195              (218)       1 396    
Operating leases                  400           292         163          88              (255)         688    
EBITDA(A)                       2 589           202       1 361       1 168                 -        5 320    
EBITDA margin (%)(A)             29.9           2.2        13.3        60.6                           25.5    
Capital expenditure             1 649         1 354         106         167                          3 276    
(1) Excludes the VERP and VSP cost of R282 million. 
(A) The EBITDA balance referred to above includes the significant financing component of R75 million 
    and R66 million in the prior period recognised in accordance with IFRS 15 Revenue from contracts 
    with customers. The significant financing component is included in operating revenue as a separate 
    component of revenue. Excludes a once-off impact of R282 million relating to voluntary early 
    retirement package (VERP) and voluntary severance package (VSP) costs.

                            Openserve      Consumer         BCX       Other      Eliminations        Group    
September 2017                     Rm            Rm          Rm          Rm                Rm           Rm    
Revenue                         8 589         7 900      10 685       3 010           (10 366)      19 818    
Fixed                           8 589         4 685       5 593          71            (6 663)      12 275    
Mobile                                        3 215                                       (72)       3 143    
Information technology                                    5 004                        (1 352)       3 652    
Other                                                        88       2 939            (2 279)         748    
Costs of contracts                                   
with customers                     44         1 312       1 355         219               (43)       2 886    
Payments to other operators       575           556         460           -              (419)       1 172    
Net revenue                     7 970         6 032       8 870       2 791            (9 903)      15 760    
Other income                      199           283           1         345              (599)         229    
Operating expenses              5 768         6 356       6 907       2 290           (10 502)      10 819    
Employee expenses               2 107           496       2 486         272                (1)       5 360    
Selling, general and                                 
administrative expenses         2 446         5 469       4 158       1 685           (10 227)       3 531    
Service fees                      788           156         173         301               (43)       1 375    
Operating leases                  427           235          90          32              (231)         553    
EBITDA                          2 401           (41)      1 964         846                 -        5 170    
EBITDA margin (%)                28.0          (0.5)       18.4        28.1                           26.1    
Capital expenditure             2 295         1 185         262         232                          3 974    

Productive capital

Openserve
Openserve's revenue continues to be resilient through its drive to promote next generation fibre and ethernet
products, despite a decline in voice revenue. We are committed to modernising and commercialising the network 
and continue to drive the migration of legacy products to next generation fibre-based products. In line with the 
strategy, we have announced a minimum fibre to the home speed offering starting at 10 Mbps, effective from 
January 2019.

Revenue increased 0.9 percent to R8 665 million, mainly driven by growth in fibre to the businesses connected of 
which 59.5 percent are utilising our ethernet base products. Across the fibre ecosystem, we see steady growth and 
have continued our journey to provide value-based pricing to our clients. In this endeavour we will introduce 
increased bandwidth and optimise pricing to stimulate further connectivity growth. We have been prudent in our 
investment across our fibre to the home strategy, and have improved our fibre to the home connectivity rate to 
35.6 percent, compared to 24.5 percent in the prior year. In addition, we have embarked on a strategy to migrate 
our access copper-based broadband customers to a fibre-based service where viable, and we are confident that 
this strategy will result in increased access to high-speed broadband data connectivity.

In conjunction with the commercialisation of our network we saw a marked improvement in our service delivery. 
This was achieved by continuous operational efficiency. As a result, EBITDA increased 7.8 percent to R2 589 million, 
with an EBITDA margin of 29.9 percent, 1.9 percentage points higher than the prior year.

Capital investment of R1 649 million focused on network modernisation. We have seen our national optical footprint
expanding by over 10 000 kilometres to 161 119 kilometres, with over 2.6 million premises next generation access fibre
passed. To meet the demands of increased speed, capacity, lower latency and the digitalisation of the network fabric, the
ongoing deployment of packet optical transport network across national and regional fibre routes, gives us the opportunity
to deploy technologies that can enable an exponential increase in data traffic. Through the deployment, we have the
ability to introduce higher speed offerings of up to 200 Mbps to our fibre-to-the-home base. The improved technology 
evolution has continued to drive our consumption, with an increase of 25.1 percent on fixed-line broadband data.
  
Customer experience is an essential component in driving commercialisation. Openserve remains committed to improving
service delivery and customer expectations, renewing existing clients and attracting new clients to our network. We have
focused our assurance and fulfilment practices to improve our access network experience. We have migrated more than 
87 percent of our workforce onto a digital workforce allocation platform, thereby enabling flexibility and nimbleness 
with our service delivery contributing to improved customer experience. 

Telkom Consumer
Telkom Consumer's performance was driven by the mobile business, which was underpinned by our capital investment in
the wireless network, extension of distribution channels, increased store footprint and innovative data-led products 
which have resonated well with customers. To capitalise on the success of our mobile business, we have begun migrating
selected traditional fixed-line customers to wireless technologies, such as LTE. 

Telkom Consumer operating revenue grew 14.6 percent, driven by a 53.8 percent growth in mobile service
revenue to R3 579 million. The impressive growth in the mobile business was supported by 50.0 percent growth in
subscribers to 6.5 million, with the blended ARPU increasing by 12.8 percent to R104. Post-paid subscribers
increased by 25.4 percent to 1.7 million subscribers. Our innovative FreeMe plan remains the core value
proposition within our post-paid offering. To this end, 41.1 percent of our post-paid subscribers have adopted the
FreeMe product suite as their base plan. Pre-paid subscribers increased 60.7 percent to 4.9 million with the ARPU
increasing by 33.5 percent to R71. To achieve a quality of service network offering and to broaden our coverage 
domain, we increased our integrated sites by 27.2 percent to 4 383 sites.

Mobile data was a major contributor to revenue with a 55.8 percent growth, supported by 121 percent growth in 
data usage. The refarming of our 1800 MHz spectrum is paying dividends with smartphone subscribers increasing 
by 83.9 percent to 3.8 million. Our fixed wireless access and WIFI continue to do well with an increase of 
22.1 percent to more than 962 000 customers, driven by our popular "deal of the month", improved quality and 
the footprint expansion of our LTE network. 

In the period, Telkom launched the first Unlimited LTE offering, including VoLTE and attractive calling rates and an
extension of VoLTE across the entire LTE portfolio. We are seeing significantly more fibre customers, albeit from a low
base, driven by an increase in new-to-franchise businesses and the migration of DSL customers to fibre. Our fibre
acceleration has been stimulated by the ongoing onboarding of third party fibre network service providers to extend 
the fibre reach. 

Our content offering LIT video, music on mobile and LIT TV streaming device for fixed-broadband is gaining momentum.
Upon review of the LIT proposition, we have now architected a full bouquet of streaming bundles (daily, weekly and
monthly), which provide customers access to cheaper streaming data with LIT content partners. Sales for FreeMe recurring 
data bundles have steadily increased since the introduction of LIT services on the 2GB and higher services. We have
strengthened our position in the content space by also offering enhanced gaming options and online video games and hardware,
software and accessories. We seek to stimulate broadband growth through the broadband services offering, as consumers
increase their needs in the world of lifestyle and entertainment. Our LIT streaming bundles offer cheaper streaming data to
LIT content partners. We also drive broadband growth by offering online video games, hardware, software and accessories. 

We have instituted specific initiatives to counter the decline in the fixed business, such as innovative
fixed-broadband products (led by the Unlimited product suite as well as customer speed upgrade migrations) and content 
offerings. In addition, we have begun migrating selected traditional fixed-line customers to wireless technologies.

Our drive to improve the customer experience is driven by our "Serving is the New Selling" campaign. This aims to
focus on people, processes, systems and simplifying the overall value chain. Key initiatives included establishing a 
service culture, expanding service capabilities to our stores and introducing "walk-in customer care" as part of our 
channel reach, having dedicated specialised service teams to pro-actively deal with customer service challenges, 
improving customer service journeys and the automation of certain processes.

BCX
The trading environment continues to be challenging as the country entered a technical recession resulting in reduced
and deferred spending by large corporates in South Africa. In addition, public sector ICT spend has remained subdued.
The performance of BCX has been adversely affected by this environment as well as the higher than anticipated voice
revenue decline. 

Revenue declined 4.3 percent to R10 222 million, mainly attributable to the decline in voice revenue which was down 
11.9 percent. The voice revenue decline is more pronounced in the public sector and SMME sector. BCX continues to 
retain the large enterprise customer base and the enterprise revenues remained flat compared to the previous year. 
The revenue from customer premise equipment growth is a positive leading indicator for future growth in data revenues.

EBITDA at R1 361 million is 30.7 percent lower than previous year due mainly to the decline in the voice revenue and
the high cost structure of the organisation. We have commenced with the initiatives to contain cost to improve the
profitability of the organisation. The second phase of cost containment initiatives is underway, and these include the
consolidation of the offices and datacentres, simplification of the organisational structure, reduction of the executive and
middle management structure and rationalisation of the product portfolio. 

The legal integration of 34 entities to form one BCX is progressing very well. The focus this year was to
create one organisation, common processes and or single Go-To-Market model. We created two solution centres -
telecommunication solutions and IT solutions - to enable better focus and ensure that we service customers more
effectively. The initial feedback from customers, primarily medium and large enterprises, is positive.

Gyro
Gyro continues to establish a solid foundation for revenue opportunities and asset value enhancement for the tower and
property portfolios. Gyro's focus has been to optimise the tower portfolio, undertake development planning for select
properties and optimise property related expenses for the group and divisions. The tower portfolio remains the staple
source of external revenue, and it is the area of primary focus as we strive to increase external revenue.

During the period under review, we undertook revenue enhancement initiatives in Gyro's tower portfolio. As a result,
our mast and towers external revenue grew 21.7 percent to R314 million, from the 1 300 co-located towers. These
initiatives are ongoing, as we continue to optimise the existing tower portfolio while also adding newly built towers and
acquisitions where possible. We have assessed the entire portfolio for suitability of co-location (multi-tenancy) and have
introduced 3 000 additional towers to potential tenants for new tenancy possibilities. To take advantage of further external
revenue opportunities, we are removing redundant equipment from 1 380 co-located towers and have identified 650 sites 
for new tower construction.

We currently have 40 properties in the development pipeline of which we have undertaken market research, with a full
portfolio study to be completed during the second half of the year. Rezoning is currently in process. We expect
significant progress on preliminary concept design, costing and tenant recruitment by the end of the year, which will 
allow us to begin project development where rental revenue has been secured. We have reviewed the current group and 
divisions space demand and occupancy in major metropolitan areas and have embarked on a short-term and long-term 
solution for office space user demand optimisation.

The objective to reduce rental expenditure to third party landlords, in markets where Telkom and Gyro properties offer
suitable accommodation, is at the core of the short-term solution. We have identified leases for BCX, Yellow Pages and
Openserve in Cape Town, Durban, Port Elizabeth and Johannesburg that can be replaced with a more cost-effective tenancy.
This initiative will be extended to other major cities throughout the country. The second phase of the office user
demand optimisation project entails consolidation of the divisions in major metropolitan areas into newly developed
buildings, to optimise productivity. 

Yellow Pages (known as Trudon)
Yellow Pages, known as Trudon, is evolving from a largely print sales organisation to a technology enabled
organisation focused on small businesses. The business has started implementing its new operating model including the 
introduction of a lean resourcing structure and cost optimisation initiatives.

The business has continued the transformation journey towards a digitalised business. Central to this has been the
establishment of workstreams that look at implementing an agile and cost efficient operating model. As part of the
journey, the business is nearing completion of the reorganisation process, including the recruitment of new digital 
skills which are critical to the success of the business in the digital economy.

The business has also expanded its third party channels and is piloting a tied agency model, which will allow
individual agents to sell Yellow Pages products through the online portal. This approach, combined with improved 
self-service and digital acquisition channels, is expected to increase penetration of Yellow Pages services in 
traditionally underserviced areas of the market. In addition, new bundles, such as Yellow Pages Sync, have been 
launched to ensure an easier product selection for customers, while offering enhanced value and competitive 
pricing, relative to other offerings in the market.

The first phase of rebuilding the Yellow Pages directory platform is now live, offering customers an improved user
experience and functionality, including the ability to register a business online. The second phase of the platform
relaunch will go live in November 2018. This will offer customers a central dashboard where performance of the various 
Yellow Pages products can be tracked as well as the order functionality of a range of Yellow Pages products and services.

Human capital
Our investment in new technologies to drive future revenue streams necessitates the evolution of our skills base 
and the acquisition of various capabilities within our organisation.

Telkom acknowledges that the external environment including technology advancements, regulatory changes and
increased competition have driven the need for an internal review of the environment. This will allow us to
become more flexible and responsive in how we, as an organisation, cultivate distinct cultures that advances
competitive advantage. The key consideration will be how much value our employees create as part of the
structural capitals of our organisation, which looks at a combination of tangible and non-tangible resources. 
The measurement of value creation forms part of the elements of our human capital strategy, with consideration to
understanding our execution challenge.
 
Our focus remains on creating efficiency and effectiveness in the context of growing the business and
achieving operational excellence through human capital investments. We continue working on understanding the
leadership and operational capability sets required to drive performance. This may include the reorganisation of
functions, identification of skill gaps and, in certain instances, possible redundancies. Where we have identified
gaps, we continue to be deliberate about the process to close out and generate value, while creating the
necessary diversity among our teams.

We continue to invest in talent within our organisation to retain key skills and ensure our future competitiveness. 
In the period under review, we continued to monitor, review and invest in our top talent. Our highlights for the period
include:
- A total of 2 792 management employees reviewed for talent mapping and succession planning. 
- Succession plans were updated for senior roles. 
- A strong focus was placed on identifying people-related challenges across each division, and there is a plan to
  address these challenges and minimise talent risks for the business.

In June 2018, we launched our Top Flight and Step Up programmes, which are aimed at developing high potential senior
executives across the group. The programme, which is grounded on the principles of continuous learning, took the form 
of a blended learning intervention with a combination of structured and unstructured learning components.

Intellectual capital
Our operating business model has aligned into business units to ensure that we better focus on customer segments, on
which, the IT model was redesigned. 

The priority for the chief information officer of each division is customer service and experience across the delivery
platforms as well as the automation of back-office functions. This will improve efficiencies, reduce cycle time and
costs, and eliminate manual activities where possible as IT plays an enabling function in this environment.
  
The next generation network (NGN) platform accommodates the full integration of order fulfilment, assurance and
billing capabilities required to support our fixed and mobile consumer customers. We have made progress with the 
migration of consumer fixed-line customers onto the NGN platform, and we are now supporting our consumer customer 
base from a single converged fixed-mobile platform. 
  
Telkom's IT focus will shift more intentionally to comprehensive digital platforms. The journey that we are defining 
will allow us to engage with our customers and suppliers, as well as transact with them seamlessly through 
self-service or social media. On this journey, we will further automate back-office processes and eliminate 
mundane and repetitive tasks, which will ensure timeous start-to-finish processes. 

IT service management will be a top priority in the continued success of these services. We have also considered the
impact of a software-defined network and network field virtualisation on the business, as this will further enhance
customer experience, network performance and management. 

Through our ongoing information security management programme, Telkom is continually implementing new and upgraded
information security and cybersecurity systems to ensure appropriate and effective protection, detection and prevention 
of cyberattacks and cybercrime. Key to our cyber strategy is the deployment of active cybersecurity incident detection 
and response capabilities. We have also established a cyber and information security assurance capability to monitor the
effectiveness of the information security management initiatives.

An additional, but crucial layer of cybersecurity defence is delivered by our employees. Telkom has rolled out a 
continual information security awareness programme to all its employees and third parties. This equips all levels of 
business with the necessary cyber awareness to ensure that employees and third parties understand their roles in 
cybersecurity.  

Cyberthreats and active cyberattacks not only require continual action and awareness within our own business, but 
also on the part of our customers. Telkom, through BCX, is developing partnerships with internationally accredited 
cybersecurity practitioners and service providers. These partnerships will allow us to take the same effective 
technologies, processes and protection that Telkom is building for our own internal business protection, and extend 
these advanced cybersecurity offerings to our customers to improve their business environments.

Social and relationship capital
We recognise that sustainable transformation is at the core of our broad-based black economic empowerment (B-BBEE)
status, and we apply a beyond-compliance perspective when addressing our B-BBEE status. Through the group's commitment 
to B-BBEE certification, Telkom's rating has improved from level 6 to level 4, and BCX was rated level 3. 

We continue with initiatives to improve the B-BBEE certification status of the group. These include a transformation 
and compliance plan to address the priority elements, the implementation of an aggressive skills development programme 
and the cascading down of the B-BBEE certification plan and targets at an individual level.
 
The Telkom Enterprise and Supplier Development (ESD) programme continues to drive our beyond-compliance perspective to
develop black-owned businesses in the ICT sector. This initiative is aimed at enhancing market access opportunities,
driving ICT innovation, and fostering inclusive participation of majority black-owned ICT businesses in Telkom's supply
and value chain. ESD is an important part of our social commitment to B-BBEE.

Telkom continues to invest in attracting, developing and employing young talent through a myriad of programmes ranging
from educational support for high school learners, bursary programmes for further education and training, learnerships
as well as support for young entrepreneurs.
 
The Centre of Excellence Postgraduate programme is aimed at allowing young graduates to perform research in a
world-class environment and develop much needed ICT skills. Through the programme, approximately 240 full-time 
postgraduate students study towards an MSc or PhD qualification each year.

Natural capital
Our natural capital management approach is guided by our Environmental and Climate Change policies.  

To ensure an integrated approach to environmental management, the principles guiding these policies are reviewed 
annually to assist Telkom to minimise those activities that may negatively impact the environment and to ensure 
compliance of environmental legislation, associated regulations and applicable local and international standards. 

While Telkom is categorised as a medium to low risk organisation for environmental impact, we are committed to
addressing the causes and adapting to the impacts of climate change. Telkom has participated in the 
Carbon Disclosure project over the past seven years. 

Replacement of water dependent cooling towers for heating, ventilation and air-conditioning (HVAC) systems in the Cape
Town area are in different stages of completion. Additionally, cooling towers for emergency power systems are being
replaced with radiators to lessen Telkom's dependency on water and the associated risks to business continuity.
- To date, eight of 10 HVAC projects have been concluded at a total cost of R10.5 million. The remaining two projects
  are due for completion by December 2018 at a further cost of R10 million.
- It is estimated that these changes will bring about a total annual saving of 131 224 kL of water.
- Nine projects to replace the emergency power system cooling towers are due for completion by the end of December 2018 
  at a total cost of R24.9 million.
- Assuming similar trends in future emergency power requirements, 11 695 kL of water could be saved annually due 
  to the foregoing changes.

Outlook
Looking forward, we believe that our operating environment will continue to be challenging with macro-economic 
conditions not being favourable to growth, and the private and public sectors respectively deferring spend 
on ICT. Our strategy therefore will be more focussed on pockets of growth, while we continue extracting efficiencies
from past investments and driving a sustainable cost management approach.

We will continue to allocate capital diligently, including monitoring the return we make on our investments.
The capital investment to date is already bearing fruit with our new revenue streams, such as mobile service 
revenue and fixed data revenue, driving growth for the group. This will, however, not compensate for the decline 
in traditional voice revenue. We will continue to manage the decline in traditional revenue streams by 
proactively migrating customers from traditional to new revenue streams. We are mindful of the migration 
from traditional to new revenue streams that are at lower margins with increased costs to serve. The new 
call termination rate glide path will further put our margins under pressure. As a result, we are embarking 
on various initiatives to manage costs over the guidance period to maintain overall margins. These mainly 
include, among others, decommissioning components of our network as we migrate customers from copper, 
retire IT systems and optimise staff to align with the new operating model. As a group, we are committed 
to containing costs and maintaining margins according to our medium-term guidance despite pressures from 
the regulator, a weak economic environment and a decline in voice revenue.

In the consumer environment, we intend to accelerate the migration of customers to newer technologies,
particularly in areas where our customers are on copper, as we move them to fixed wireless access (LTE) and 
fibre networks, in order to retain our customers and maintain market share. To support the migration strategy, 
we intend to accelerate our investment in our network for coverage and capacity and continue to utilise our 4G
spectrum efficiently as the bulk of our traffic is on our 4G network. 

In addition, we have entered into a roaming agreement that will further strengthen our ability to accelerate
mobile network deployment. The new roaming agreement will provide us with seamless roaming, expanded access
to LTE coverage (4G) and enhanced high-value location coverage. This will enable us to provide improved
customer experience and allow us to extend our coverage footprint. We will also be partnering with over-the-top
players to provide data-led propositions to our customers and increase our focus on improving the overall
fixed-line customer experience.

In the wholesale environment, we will continue to review our network technology including consolidating
various disparitive networks to drive economies of scale. We continue to optimise our network footprint by
analysing our current deployed network. We will upgrade where necessary, and decommission other components of 
our network as we migrate customers from copper using alternative technology where deemed optimal. In the fibre
space, we will focus on connecting homes to ensure return in line with our commercialisation strategy and migrate
customers to fibre in areas where we have already rolled out fibre. 

In the BCX environment, we expect a continued decline in voice and spend. The public sector will continue to
be under pressure and hence we are pursuing strategies to mitigate the impact. We aim to accelerate data growth 
while also improving the profitability of IT services and scale new technologies. We will accelerate metro
ethernet rollout while also focussing on growing Cloud revenue. We understand the importance of addressing our
cost structure and we will, among others, review our portfolio and divest where necessary and rationalise our
executive and management structures. We will further consolidate delivery structures, streamline our product
portfolio overheads and automate IT operations processes.

The regulatory trajectory remains uncertain and suggests possible future regulation of wholesale fixed
services and downward pressure on data retail prices. 

There is now certainty on the call termination rates for the next three years, starting 1 October 2018. ICASA 
has also identified several segments of fixed wholesale services as priority markets which could result in 
wholesale revenue reduction. Indications are that ICASA will begin its detailed market enquiry on the mobile 
wholesale market in the new year. ICASA's identification of wholesale mobile market could however be positive 
for the group. 

We expect high demand spectrum to be licensed within the next 12 to 18 months. However, the 700 MHz and 800 MHz 
bands will only be commercially available after completion of digital migration and restacking. We also
expect the Electronic Communication Amendment Bill to be passed within the next few months. We will continue 
to engage ICASA and other regulatory bodies to ensure that the regulatory regime is fair and will promote
competition while being conducive to continued investment in infrastructure. 

Dividend policy remains unchanged
Our policy is to pay an annual dividend of 60 percent of headline earnings with an interim dividend of 40 percent 
of interim headline earnings.

Declaration of dividend
In line with our dividend policy, the board declared an interim gross ordinary dividend 23 of 112.14144 cents per share. 
The declared dividend is payable on Monday, 3 December 2018 to shareholders recorded in the register of the company at 
close of business on Friday, 30 November 2018. The dividend will be subject to a local dividend withholding tax rate 
of 20 percent, which will result in a net interim dividend of 89.71315 cents per ordinary share to those shareholders 
not exempt from paying dividend withholding tax. The ordinary dividend will be paid out of available cash balances.

The number of ordinary shares in issue at date of this declaration is 511 140 239. Telkom SA SOC Limited's tax
reference number is 9/414/001/710.

Salient dates with regards to the ordinary interim dividend
Declaration date                     Tuesday, 13 November 2018      
Last date to trade cum dividend      Tuesday, 27 November 2018      
Shares trade ex-dividend             Wednesday, 28 November 2018    
Record date                          Friday, 30 November 2018       
Payment date                         Monday, 3 December 2018      

Share certificates may not be dematerialised or rematerialised between Wednesday, 28 November 2018, and Friday, 
30 November 2018, both days inclusive.

On Monday, 3 December 2018, dividends due to holders of certificated securities on the South African register will be
transferred electronically to shareholders' bank accounts.

Dividends in respect of dematerialised shareholders will be credited to shareholders' accounts with their relevant
central securities depository participant or broker.

  
OPERATIONAL DATA

                                                     September        September                 
Subscribers                                               2018             2017            %    
Broadband subscribers                                                                           
Fixed broadband subscribers(1)                         974 181          999 311         (2.5)    
Mobile broadband subscribers                         4 751 688        2 848 568         66.8    
Fixed subscribers                                                                               
Closer subscribers                                     781 542          806 647         (3.1)    
Internet all access subscribers(2)                     550 606          533 550          3.2    
Fixed access lines ('000)(3)                             2 566            2 840         (9.6)    
Revenue per fixed access line (ZAR)                      2 175            2 265         (4.0)   
Fixed voice ARPU                                        359.09           365.09         (1.6)   
Fixed broadband ARPU                                    194.42           188.03          3.4    
Managed data network sites                              45 385           46 844         (3.1)   
Mobile subscribers                                                                              
Active mobile subscribers(4)                         6 545 101        4 364 508         50.0    
  Pre-paid                                           4 877 613        3 035 173         60.7    
  Post-paid                                          1 667 488        1 329 335         25.4    
ARPU (Rand)                                             104.28            92.46         12.8    
  Pre-paid                                               70.68            52.96         33.5    
  Post-paid                                             191.47           183.81          4.2    
Pre-paid churn (%)                                        53.2             52.1         (1.1)   
Post-paid churn (%)                                       12.5             12.0         (0.5)   
(1) Includes xDSL and FTTH lines of which 6 420 (September 2017: 6 985) are internal lines.
(2) Includes Telkom Internet ADSL, ISDN and WiMAX subscribers. 
(3) Includes copper voice and broadband, ISDN and FLLA. Excludes Telkom internal lines.
(4) Based on a subscriber who has participated in a revenue-generating activity within the last 90 days. 

                                                     September        September                 
Volumes                                                   2018             2017            %    
Fixed broadband data volumes (petabytes)                   488              390         25.1    
Mobile broadband data volumes (petabytes)                  159               72        120.8    
Total fixed-line traffic (millions of minutes)           5 630            6 449        (12.7)    
Network                                                                                         
Ports activated via MSAN access                      1 446 800        1 413 594          2.3    
Fibre to the home                                      393 101          300 506         30.8    
Fibre to the cabinet                                 2 286 595        2 123 523          7.7    
Mobile sites integrated                                  4 383            3 445         27.2    
LTE sites integrated                                     2 607            1 945         34.0    
Active fibre connectivity rate (%)                        35.6             24.5         11.1    
Group employees(5)                                      17 862           18 522         (3.6)   
Telkom company employees                                 9 952           10 050         (1.0)   
  Consumer                                               1 151            1 384        (16.8)   
  Openserve                                              8 527            8 375          1.8    
  Corporate Centre                                         274              291         (5.8)    
BCX group employees(6)                                   7 432            7 778         (4.4)   
Yellow Pages group employees                               380              483        (21.3)   
Gyro employees(6)                                           98              211        (53.6)    
(5) Based on number of group permanent employees. 
(6) 132 Gyro employees were transferred to BCX group.


FINANCIAL PERFORMANCE

Financial performance information
Pro forma condensed consolidated interim statement of profit and loss*
                                                      Adjusted         Restated                   
                                                     September        September                  
                                                         2018*             2017                       
                                                            Rm               Rm            %            
Revenue from contracts with customers                   20 847           19 818          5.2          
  Payments to other operators                            1 285            1 172         (9.6)        
  Costs of contracts with customers                      3 176            2 886        (10.0)       
Net operating revenue                                   16 386           15 760          4.0          
  Other income                                             192              229        (16.2)       
Operating expenses                                      11 258           10 819         (4.1)        
  Employee expenses                                      5 287            5 360          1.4        
  Selling, general and administrative expenses           3 887            3 531        (10.1)       
  Service fees                                           1 396            1 375         (1.5)        
  Operating leases                                         688              553        (24.4)       
EBITDA                                                   5 320            5 170          2.9        
  Depreciation, amortisation, impairment and                      
  write-offs                                             2 802            2 660         (5.3)
Operating profit                                         2 518            2 510          0.3       
Investment income                                          120               64         87.5         
Finance charges and fair value movements                   443              352        (25.9)       
  Finance charges                                          568              358        (58.7)       
  Foreign exchange and fair value movement                (125)              (6)     1 983.3    
Profit before taxation                                   2 195            2 222         (1.2)       
  Taxation                                                 574              594          3.4         
Profit for the period                                    1 621            1 628         (0.4)       
* Reported results are outlined earlier.
                                                                                                    
Notes
Revenue from contracts with customers grew 5.2 percent, supported by impressive growth in mobile revenues. 
Traditional fixed voice continued to decline while fixed data revenues remain flat.

Payments to other operators increased 9.6 percent mainly because of higher payments to mobile operators in 
line with the 44.5 percent increase in our mobile voice and subscription revenue.

Costs of contracts with customers increased 10.0 percent following an increase in mobile acquisition cost 
driven by the 60.7 percent increase in mobile pre-paid subscribers.

Operating expenses increased due to:
a. Selling, general and administrative expenses mainly due to higher maintenance driven by the increase 
   in mobile sites and an increase in marketing expenditure from our consumer segment.
b. Operating leases as a result of the 27.2 percent increase in mobile sites.
Partially offset by:
c. Employee expenses driven by the group headcount decrease of 3.6 percent to 17 862 full-time employees.

Group positively impacted by the 4.0 percent increase in net revenue while operating expenses increased 
4.1 percent. The lower-than-inflation growth in operating expenses is attributable to our continued focus 
on cost-efficiency initiatives as part of our ongoing business transformation.

Depreciation, amortisation, impairments and write-offs increased 5.3 percent mainly impacted by the increase 
in capital expenditure, partially offset by the extension of useful lives.

Investment income increased mainly due to higher cash balances.

Finance charges increased largely driven by higher borrowings partly offset by lower forex and fair value 
movements buoyed by a fair value gain on the revaluation of the cell captive.

Operating revenue
                                                                       Restated                 
                                                     September        September                 
                                                          2018             2017                 
                                                            Rm               Rm            %    
Fixed                                                   11 628           12 275         (5.3)   
Voice and subscriptions                                  5 456            6 378        (14.5)   
  Usage                                                  2 039            2 357        (13.6)    
  Subscriptions                                          3 417            4 021        (15.0)    
Interconnection                                            410              320         28.1    
  Fixed-line domestic                                      176              171          2.9    
  Fixed-line international                                 234              149         57.0    
Data                                                     4 889            4 872          0.3    
  Data connectivity                                      3 387            3 356          0.9    
  Internet access and related services                     995              951          4.6    
  Managed data network services                            488              545        (10.5)   
  Multi-media services                                      19               20         (5.0)   
Customer premises equipment sales and rentals              789              640         23.4    
  Sales                                                    269              139         93.5    
  Rentals                                                  520              501          3.8    
Other revenue                                               83               65         27.7    
Mobile                                                   4 711            3 143         49.9    
  Mobile voice and subscriptions                           789              546         44.5    
  Mobile interconnection                                   120               68         77.9    
  Mobile data                                            2 669            1 713         55.8    
  Mobile handset and equipment sales                     1 058              750         41.1    
  Significant financing component revenue                   75               66         13.6    
Information technology                                   3 774            3 652          3.3    
Other                                                      734              748         (1.9)   
  Yellow Pages                                             353              421        (16.2)    
  Gyro                                                     317              260         21.9    
  VS Gaming                                                  9                9            -    
  BCX - Fastnet                                             55               58         (5.2)   
Total(1)                                                20 847           19 818          5.2    
(1) The adoption of IFRS 15 resulted in a marginal reduction in revenue of R79 million in the current 
    period (September 2017: R41 million). The implementation of IFRS 15 also highlighted a prior period 
    error of R250 million relating to the recognition of Mobile CPE revenue to dealer stores.

Revenue variance explanations
Fixed-line voice usage and subscription revenue decreased by 14.5 percent to R5 456 million (September 2017: 
R6 378 million) as the declining trend accelerated in the current period driven by migration to new technologies 
and a 9.6 percent decline in the number of fixed access lines.

Fixed interconnection revenue increased 28.1 percent to R410 million (September 2017: R320 million) mainly due to 
the international interconnection revenues which improved by the weakening of the Rand against foreign currencies.

Fixed-line data revenue is flat at R4 889 million (September 2017: R4 872 million).

Fixed data connectivity services increased 0.9 percent to R3 387 million (September 2017: R3 356 million) due to 
a decline in traditional revenue streams, offset by the increase in fibre and new data products including fibre 
to the home and metro-ethernet.

Internet access and related services revenue increased 4.6 percent to R995 million (September 2017: R951 million) 
driven by the 3.2 percent increase in Internet all access subscribers.

Managed data network services revenue decreased 10.5 percent to R488 million (September 2017: R545 million) mainly 
due to a 3.1 percent decrease in the number of managed network sites to 45 385 (September 2017: 46 844) mainly 
supported by site consolidations from customers.

Mobile voice and subscriptions revenue increased 44.5 percent to R789 million (September 2017: R546 million). 
This is attributed to a 50 percent increase in the number of active mobile subscribers.

Mobile data revenue increased 55.8 percent to R2 669 million (September 2017: R1 713 million) driven by our 
strategy to focus on data which led to an increase in mobile data traffic.

Information technology increased 3.3 percent to R3 774 million (September 2017: R3 652 million) mainly due to 
an increase in the application solutions revenue line.

Condensed consolidated statement of financial position*
                                                                       Restated                 
                                                     September            March                 
                                                          2018             2018                 
                                                            Rm               Rm            %
Assets                                                                                     
  Non-current assets                                    36 706           36 417          0.8        
  Property, plant and equipment                         30 725           30 377          1.1        
  Intangible assets                                      4 598            4 492          2.4        
  Other investments                                         73              100        (27.0)     
  Employee benefits                                        752              627         19.9       
  Other financial assets                                   125               60        108.3      
  Finance lease receivables                                244              262         (6.9)      
  Deferred taxation                                        189              499        (62.1)     
  Current assets                                        15 209           14 083          8.0        
  Inventories                                            1 384            1 435         (3.6)      
  Contract assets                                        1 679            1 425         17.8       
  Income tax receivable                                     49               54         (9.3)      
  Finance lease receivables                                111              112         (0.9)      
  Trade and other receivables                            7 716            6 657         15.9       
  Other financial assets                                   426              163        161.3      
  Other investments                                      1 530            1 509          1.4        
  Cash and cash equivalents                              2 314            2 728        (15.2)     
Total assets                                            51 915           50 500          2.8        
Equity and liabilities                                                                     
Equity attributable to owners of the parent             28 903           26 936          7.3        
  Share capital                                          5 050            5 050            -          
  Share-based compensation reserve                         452              377         19.9       
  Non-distributable reserves                             1 574            1 579         (0.3)      
  Retained earnings                                     21 827           19 930          9.5        
  Non-controlling interest                                 371              359          3.3        
Total equity                                            29 274           27 295          7.3        
  Non-current liabilites                                 8 854           10 278        (13.9)     
  Interest-bearing debt                                  7 401            7 165          3.3        
  Provisions                                               701            2 432        (71.2)     
  Financial liabilities                                     96                -        100.0      
  Deferred revenue                                         493              502         (1.8)      
  Deferred taxation                                        163              179         (8.9)      
  Current liabilities                                   13 787           12 927          6.7        
  Trade and other payables                               7 476            6 878          8.7        
  Shareholders for dividend                                 60               58          3.4        
  Interest-bearing debt                                  2 742            2 247         22.0       
  Provisions                                             1 294            1 504        (14.0)     
  Deferred revenue                                       1 697            1 597          6.3        
  Income tax payable                                       295              363        (18.7)     
  Other financial liabilities                              223              250        (10.8)     
  Credit facilities utilised                                 -               30       (100.0)    
Total liabilities                                       22 641           23 205         (2.4)      
Total equity and liabilities                            51 915           50 500          2.8
* Does not represent pro forma information reported.        
                                                                                           
Notes
Property, plant and equipment constitutes largely of fixed and mobile network equipment. The growth is 
driven by additions of R2 913 million, partially offset by deprecation of R2 363 million.

Intangible assets constitutes largely of software and goodwill. The increase in intangibles is driven 
by additions of R363 million, mainly attribute to software acquisitions, partially offset by amortisation.

Employee benefits increased supported by a higher discounted rate.

Deferred tax asset reduction of 62.1 percent is attributable to a R225 million additional liability raised 
in Telkom SA SOC Limited relating to the actuarial gains recognised on the post-employment benefit plans. 
This movement was accounted for in other comprehensive income. An additional R86 million decrease in the 
deferred tax asset was accounted for in the taxation expense relating to the utilisation of temporary 
differences in the holding company financial statements.

Contract asset recognised in accordance with the adoption of IFRS 15. The 17.8 percent increase is supported 
by the 41.1 percent increase in mobile handset and equipment sales.

Trade receivables increased 15.9 percent from R6 657 million to R7 716 million driven by the increased revenue.

Current portion of other financial assets and liabilities increased to R426 million and decreased to 
R223 million respectively due to the spot rate as at 30 September 2018 depreciating against the average 
rate on our forward exchange book resulting in a mark-to-market asset.

Interest bearing debt has increased largely due to increased borrowings to fund capital expenditure and 
optimise the capital structure of the group.

The reduction in provisions is largely due the benefit received from the increase in the discount rate 
applied in the calculation of the Telkom Retirement Fund liability position.
The adjustment was accounted for in other comprehensive income.

Trade payables grew largely due to an increase in accruals supported by the 5.7 percent increase in direct 
and operating expenses, excluding the VERP and VSP costs of R282 million.

Condensed consolidated provisional statement of cash flows*
                                                     September        September                 
                                                          2018             2017                 
                                                            Rm               Rm             %   
Cash flows from operating activities                     2 163            1 517          42.6       
  Cash receipts from customers                          20 223           19 886           1.7        
  Cash paid to suppliers and employees                 (16 172)         (16 013)          1.0        
Cash generated from operations                           4 051            3 873           4.6        
Interest received                                          195              125          56.0       
Finance charges paid                                      (346)            (264)         31.1       
Taxation paid                                             (497)            (723)        (31.3)     
Cash generated from operations before                    3 403            3 011          13.1       
dividend paid                                                                                       
Dividend paid                                           (1 240)          (1 494)        (17.0)     
Cash flows utilised for investing activities            (3 163)          (3 878)        (18.4)     
  Proceeds on disposal of property, plant and                        
  equipment and intangible assets                           40               52         (23.1)     
  Additions to assets for capital expansion             (3 224)          (3 974)        (18.9)     
  Investments made by FutureMakers                         (13)               -         100.0      
  Realisation of investment in other financial assets       34               44         (22.7)     
Cash flows from financing activities                       616            2 182         (71.8)     
  Loans raised                                           1 500            4 930         (69.6)     
  Loans repaid                                            (850)          (2 494)        (65.9)     
  Purchase of shares for the Telkom share                            
  plan and subsidiaries long-term incentive                          
  share scheme                                             (47)               -         100.0      
  Finance lease repaid                                     (14)              (3)        366.7      
  Repayment of derivatives                                (104)            (299)        (65.2)     
  Proceeds from derivatives                                131               48         172.9      
Net decrease in cash and cash equivalents                 (384)            (179)        114.5      
  Net cash and cash equivalents at 1 April               2 698            1 519          77.6       
  Effect of foreign exchange rate gains                              
  on cash and cash equivalents                               -                3        (100.0)    
Net cash and cash equivalents at the end of                    
the period                                               2 314            1 343          72.3
* Does not represent pro forma information reported. 

Notes
Cash generated from operations improved in line with our 2.9 percent increase in EBITDA(A).

Increased finance charges paid is largely due to increased borrowings.

Taxation paid decreased primarily due to lower current taxation in the current period.

Reduction in payments relating to additions to assets for capital expansion are largely due to reduction 
in capex roll-out.     

The reduction in loans raised is largely due to disciplined working capital management as well as lower 
capital expenditure.    

(A) The EBITDA balance referred to above includes the significant financing component of R75 million and 
    R66 million in the prior period recognised in accordance with IFRS 15 Revenue from contracts with 
    customers. The significant financing component is included in operating revenue as a separate 
    component of revenue. Excludes a once-off impact of R282 million relating to voluntary early 
    retirement package (VERP) and voluntary severance package (VSP) costs.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Preparer and supervisor of the condensed consolidated interim financial statements
These condensed consolidated interim financial statements were prepared by the Telkom finance staff under 
the supervision of the group chief financial officer, Tsholofelo Molefe CA (SA).

Board approval
These condensed consolidated interim financial statements were authorised for issue on 9 November 2018 by the 
Telkom SA SOC Limited board of directors and published on 13 November 2018.

Independent review
The directors of the company take full responsibility for the preparation of the condensed consolidated interim
financial statements. The condensed consolidated interim financial statements have been reviewed by our 
independent joint auditors PricewaterhouseCoopers Inc. and SizweNtsalubaGobodo Grant Thornton Inc. in accordance 
with International Standards on Review Engagements (ISRE) 2410.

A copy of the independent auditors' review report on the condensed consolidated interim financial statements is 
available for inspection at the company's registered office, together with the interim financial statements 
identified in the independent auditors' review report.
 
The joint independent auditors' review report does not report on all of the information contained in this 
announcement. Shareholders are therefore advised that in order to obtain a full understanding of the nature of the 
joint independent auditors' engagement they should obtain a copy of the independent auditors' review report together 
with the accompanying interim financial statements from the company's registered office.


Condensed consolidated interim statement of profit or loss and other comprehensive income
for the period ended 30 September 2018
                                                                         Reviewed Six        Restated Six     
                                                                         months ended        months ended    
                                                                         30 September      30 September**    
                                                                                 2018                2017    
                                                             Notes                 Rm                  Rm    
Revenue from contracts with customers                            3             20 847              19 818    
Payments to other operators                                                     1 285               1 172    
Costs of contracts with customers                                               3 176               2 886    
Net operating revenue                                            3             16 386              15 760    
Other income                                                                      192                 229    
Operating expenses                                                             11 540              10 819    
Employee expenses                                                4              5 569               5 360    
Selling, general and administrative expenses                                    3 887               3 531    
Service fees                                                                    1 396               1 375    
Operating leases                                                                  688                 553    
Depreciation of property, plant and equipment                    4              2 363               2 336    
Amortisation of intangible assets                                4                353                 359    
Write-offs, impairments/(reversals) and losses of property,  
plant and equipment and intangible assets                        4                 86                 (35)   
Operating profit                                                                2 236               2 510    
Investment income and income from associates                                      120                  64    
Finance charges and fair value movements                                          443                 352    
Finance charges                                                                   568                 358    
Foreign exchange and fair value movements                                        (125)                 (6)   
Profit before taxation                                                          1 913               2 222    
Taxation                                                         5                494                 594    
Profit for the period                                                           1 419               1 628    
                                                                                                             
Other comprehensive income                                                                                   
Items that will be reclassified subsequently to                                                              
profit or loss                                                                                               
Exchange gains on translating foreign operations*                                  26                   4    
Items that will not be reclassified to profit or loss                                                        
Defined benefit plan actuarial gains                                            1 913                 678    
Defined benefit plan asset ceiling limitation                                       -                   2    
Income tax relating to actuarial gains                                           (225)                (63)   
Other comprehensive income for the period,                                      1 714                 621    
net of taxation                                                                                              
Total comprehensive income for the period                                       3 133               2 249    
Profit attributable to:                                                                                      
Owners of Telkom                                                                1 373               1 592    
Non-controlling interests                                                          46                  36    
Profit for the period                                                           1 419               1 628    
Total comprehensive income attributable to:                                                                  
Owners of Telkom                                                                3 087               2 213    
Non-controlling interests                                                          46                  36    
Total comprehensive income for the period                                       3 133               2 249    
Basic earnings per share (cents)                                 6              276.0               310.9    
Diluted earnings per share (cents)                               6              272.1               305.9    
 * This component of OCI does not attract any tax.                                                           
** Restated. Please refer to note 2.3, 2.4 & 2.5.                                                            
                                                             

Condensed consolidated interim statement of financial position
at 30 September 2018
                                                         Reviewed Six       Restated year                     
                                                         months ended               ended        Restated     
                                                         30 September          31 March**       1 April**    
                                                                 2018                2018            2017    
                                              Notes                Rm                  Rm              Rm    
Assets                                                                                                       
Non-current assets                                             36 706              36 417          34 125    
Property, plant and equipment                     7            30 725              30 377          27 918    
Intangible assets                                 7             4 598               4 492           4 720    
Other investments                                 9                73                 100              40    
Employee benefits                                 8               752                 627             635    
Other financial assets                            9               125                  60              60    
Finance lease receivables                                         244                 262             310    
Deferred taxation                                12               189                 499             442    
                                                                                                             
Current assets                                                 15 209              14 083          13 852    
Inventories                                      10             1 384               1 435           1 384    
Income tax receivable                                              49                  54               9    
Finance lease receivables                                         111                 112             237    
Contract assets                                  19             1 679               1 425             960    
Trade and other receivables                      19             7 716               6 657           7 136    
Other financial assets                            9               426                 163             126    
Other investments                                 9             1 530               1 509           2 388    
Cash and cash equivalents                        11             2 314               2 728           1 612    
Assets of disposal groups                            
classified as held for sale                                         -                   -              12    
Total assets                                                   51 915              50 500          47 989    
Equity and liabilities                                                                                       
Equity attributable to owners                        
of the parent                                                  28 903              26 936          27 508    
Share capital                                                   5 050               5 050           5 208    
Share-based compensation reserve                                  452                 377             452    
Non-distributable reserves                                      1 574               1 579           1 376    
Retained earnings                                              21 827              19 930          20 472    
Non-controlling interests                                         371                 359             337    
Total equity                                                   29 274              27 295          27 845    
                                                                                                             
Non-current liabilities                                         8 854              10 278           7 004    
Interest-bearing debt                            15             7 401               7 165           4 744    
Employee related provisions                      16               659               2 388           1 536    
Non-employee related provisions                  16                42                  44              56    
Other financial liabilities                       9                96                   -               -    
Deferred revenue                                                  493                 502             529    
Deferred taxation                                12               163                 179             139    
                                                                                                             
Current liabilities                                            13 787              12 927          13 140    
Trade and other payables                         17             7 476               6 878           7 516    
Shareholders for dividend*                       13                60                  58              25    
Interest-bearing debt                            15             2 742               2 247           1 541    
Employee related provisions                      16             1 097               1 340           1 397    
Non-employee related provisions                  16               197                 164             124    
Deferred revenue                                                1 697               1 597           1 571    
Income tax payable                                                295                 363             433    
Other financial liabilities                       9               223                 250             440    
Credit facilities utilised                       11                 -                  30              93    
                                                                                                             
Total liabilities                                              22 641              23 205          20 144    
Total equity and liabilities                                   51 915              50 500          47 989    
 * Includes dividend payable to non-controlling interests of Yellow Pages.
** Restated. Please refer to note 2.3 & 2.6.


Condensed consolidated interim statement of changes in equity
for the period ended 30 September 2018
                                                                       Reviewed Six          Restated Six     
                                                                       months ended          months ended     
                                                                       30 September        30 September**     
                                                                               2018                  2017    
                                                                                 Rm                    Rm    
Balance at 1 April (as previously reported)                                  27 385                27 906    
Attributable to owners of Telkom                                             27 026                27 569    
Non-controlling interests                                                       359                   337    
IFRS 15 - Revenue from contracts with                 
customers retrospective application                                             (90)                  (61)   
IFRS 9 - Financial instruments adjustment to          
opening balance for expected credit loss provision                               61                     -    
Restated balance at 1 April                                                  27 356                27 845    
Total comprehensive income for the period                                     3 133                 2 249    
Profit for the period                                                         1 419                 1 628    
Other comprehensive income                                                    1 714                   621    
Exchange gains on translating foreign operations                                 26                     4    
Net defined benefit plan remeasurements                                       1 688                   617    
Dividend declared* (refer to note 26)                                        (1 242)               (1 596)   
Increase in share-compensation reserve                                           74                    49    
Increase in treasury shares                                                     (47)                    -    
Balance at end of the period                                                 29 274                28 547    
Attributable to owners of Telkom                                             28 903                28 223    
Non-controlling interests                                                       371                   324    
 * Dividend declared includes dividend to the non-controlling interests of Yellow Pages and the BCX group.
** Restated. Please refer to note 2.3, 2.5 and 2.6.


Condensed consolidated interim statement of cashflows
for the period ended 30 September 2018
                                                                               Reviewed          Reviewed     
                                                                             Six months        Six months    
                                                                                  ended             ended     
                                                                           30 September      30 September    
                                                                                   2018              2017    
                                                                Notes                Rm                Rm    
Cash flows from operating activities                                              2 163             1 517    
Cash receipts from customers                                                     20 223            19 886    
Cash paid to suppliers and employees                                            (16 172)          (16 013)   
Cash generated from operations                                     22             4 051             3 873    
Interest received                                                                   195               125    
Finance charges paid                                               24              (346)             (264)   
Taxation paid                                                      25              (497)             (723)   
Cash generated from operations before dividend paid                               3 403             3 011    
Dividend paid                                                      26            (1 240)           (1 494)   
Cash flows utilised for investing activities                                     (3 163)           (3 878)   
Proceeds on disposal of property, plant and 
equipment and intangible assets                                                      40                52    
Additions to assets for capital expansion                                        (3 224)           (3 974)   
Realisation of investment in other financial assets                                  34                44    
Investments made by FutureMakers                                                    (13)                -    
Cash flows from financing activities                                                616             2 182    
Loans raised                                                       23             1 500             4 930    
Loans repaid                                                       23              (850)           (2 494)   
Purchase of shares for the Telkom and subsidiaries 
long term incentive share scheme                                                    (47)                -    
Finance lease repaid                                               23               (14)               (3)   
Repayment of derivatives                                                           (104)             (299)   
Proceeds from derivatives                                                           131                48    
                                                                                                             
Net decrease in cash and cash equivalents                                          (384)             (179)   
Net cash and cash equivalents at 1 April                                          2 698             1 519    
Effect of foreign exchange rate gains on 
cash and cash equivalents                                                             -                 3    
Net cash and cash equivalents at end of the period                 11             2 314             1 343    


Notes to the condensed consolidated interim financial statements
for the period ended 30 September 2018

1.      Corporate information
        Telkom SA SOC Limited (Telkom), the ultimate parent of the group, is a company incorporated and domiciled 
        in the Republic of South Africa (South Africa) whose shares are publicly traded on the JSE stock exchange. 
        The main objective of Telkom, its subsidiaries and associates (the group) is to supply telecommunication, 
        multimedia, technology, information, mobile communication services and other related information technology 
        services to the group's customers in Africa. Turnkey property and tower management solutions are also 
        provided through the Gyro group, which is a wholly owned subsidiary of the group.

2.      Basis of preparation and accounting policies
2.1     Basis of preparation
        The condensed consolidated interim financial statements have been prepared in accordance with International 
        Financial Reporting Standard, IAS 34 Interim Financial Reporting and in compliance with the Listings 
        Requirements of the JSE Limited, the South African Companies Act, 2008, the SAICA Financial Reporting Guide 
        as issued by the Accounting Practices Committee and the Financial Pronouncements as issued by the Financial 
        Reporting Standards Council.

        The condensed consolidated interim financial statements are disclosed in South African Rand, which is also 
        the group's presentation and functional currency. Unless stated otherwise, all financial information presented 
        in Rand has been rounded off to the nearest million.

        The condensed consolidated interim financial statements are prepared on the historical cost basis, with the 
        exception of certain financial instruments initially (and sometimes subsequently) measured at fair value. 
        Details of the group's significant accounting policies are consistent with those applied in the previous 
        financial year except for those listed below. The results of the period are not necessarily indicative of 
        the results for the entire year and these reviewed financial statements should be read in conjunction with 
        the audited annual financial statements for the year ended 31 March 2018 which have been prepared in 
        accordance with IFRS.    

        In an effort to declutter the notes based on materiality, certain comparatives in the notes have been aggregated 
        or disaggregated in relation to the comparative period.

2.2     Significant accounting judgements, estimates and assumptions
        In preparing these condensed consolidated interim financial statements, the significant judgements made by 
        management in applying the group's accounting policies and the key sources of estimation uncertainty were 
        consistent with those applied to the consolidated annual financial statements for the year ended 
        31 March 2018, with the exception of the judgements and estimates related to the adoption of IFRS 15 
        Revenue from contracts with customers (refer to note 2.3.1), IFRS 9 Financial instruments (refer to 
        note 2.3.2) and the useful lives of property, plant and equipment (refer to note 4).

2.3     Significant accounting policies
        The condensed consolidated interim financial statements have been prepared in accordance with the accounting 
        policies adopted in the previous financial year and corresponding interim period, except for the adoption of 
        the new and amended standards as set out below. Disclosure has only been provided for new standards and 
        interpretations which became effective for the current period where the adoption had a material impact 
        on the group.

        The group has adopted IFRS 15 Revenue from contracts with customers and IFRS 9 Financial instruments in the 
        current period.

        The group has restated the prior period financial statements as a result of the adoption of the changes 
        in the new revenue standard.

2.3.1   Adoption of IFRS 15 Revenue from contracts with customers
        IFRS 15 establishes a single comprehensive model for entities to use in accounting for revenue arising from 
        contracts with customers. The standard replaces revenue recognition guidance including IAS 18 Revenue, 
        IAS 11 Construction Contracts and the related Interpretations.

        The core principle of IFRS 15 is that an entity should recognise revenue to depict the transfer of promised 
        goods or services to customers at an amount that reflects the consideration to which the entity expects to 
        be entitled in exchange for those goods or services. The standard requires the entities in the Telkom group 
        to apportion revenue earned from contracts to the identified performance obligations in the contracts on a 
        relative stand-alone selling price basis, based on a five-step model.

        The standard also requires the capitalisation of costs incremental to obtaining the contract and recognition 
        of these costs as an expense over the contract term. Telkom has applied the practical expedient to only 
        defer costs related to contracts with terms over 12 months.

        The group is in the business of supplying fixed voice and data services to post and pre-paid customers and 
        the sale of subscription based value-added voice services and calling plans. The group also sells fixed line 
        customer premises equipment and services both for voice and data needs. The mobile communication services 
        include voice and data services and customer premises equipment. Sundry revenue includes directory services 
        and wireless data services. The equipment and services are sold both on their own in separate identified 
        contracts with customers and together as a bundled package of goods and/or services.    

        In accordance with the transition provisions in IFRS 15, the group has adopted the new standard using the 
        fully retrospective approach and has restated comparative numbers for the 31 March 2018 and 30 September 2017 
        financial periods respectively.

        The group applied the following practical expedients when applying IFRS 15 retrospectively:
        - The group did not restate comparative numbers for contracts that were completed contracts at 1 April 2017.
        - The group did not restate comparative numbers for contracts that began and ended in the same annual 
          reporting period.

        The group previously disclosed a line item in the statement of profit or loss and other comprehensive 
        income called "Cost of sales". Following the adoption of IFRS 15, this line item has been renamed to 
        "Costs of contracts with customers". The nature of the items included in this line item has remained 
        consistent from the prior reporting period.

2.3.1   Adoption of IFRS 15 Revenue from contracts with customers (continued)
        The nature and changes in the financial statements were as follows:
        
                                                         Nature of change
        Type of item     Nature and characteristics      required on implementation
        affected         of the item affected            of the new standard              Impact
        
2.3.1.1 Contract costs   The group incurs commission     Where the costs incurred         The adoption of the
                         costs in relation to            relate to the acquisition        standard has led to
                         contracts entered into          of a contract, the standard      a higher level of
                         with customers. Commission      requires the costs to be         costs qualifying
                         costs are paid based on new     capitalised and recognised       for deferral over
                         contracts entered into.         as an expense over the           the contract term.      
                                                         contract terms engaged           This has led to a      
                                                         with the customer.               reduction in costs      
                                                                                          recognised at the          
                                                                                          date of initial               
                                                                                          application as the               
                                                                                          costs are now               
                                                                                          initially accounted               
                                                                                          for as a prepaid               
                                                                                          expense and recognised               
                                                                                          as an expense over               
                                                                                          the contract term.                   
                                                                                         
2.3.1.2 Installation     The group earns                 Where the payment of an          The group had previously                 
        fee revenue      installation fees for           installation fee provides        recognised installation                       
                         various installation            the customer with a              fees on fixed term contracts              
                         services attached to            material substantive right,      over an estimated customer              
                         the provision of                the installation fee is          relationship period. Where              
                         fixed and mobile                to be recognised over            installation fees were received             
                         services. Installation          an estimated customer            in relation to month-to-month              
                         fees are recognised for         relationship period as           service contracts, the              
                         both fixed term and             opposed to recognition           installation fees were previously              
                         month-to-month contracts.       on the date that                 recognised on the date of
                                                         delivery is completed.           completion of the installation
                                                                                          service. The adoption of the 
                                                                                          standard has resulted in the 
                                                                                          deferral of installation fees 
                                                                                          over the estimated customer 
                                                                                          relationship period. This led 
                                                                                          to a reduction in revenue in 
                                                                                          the comparative statement of 
                                                                                          profit or loss and will lead 
                                                                                          to an increase in revenue in 
                                                                                          future periods as the revenue 
                                                                                          is recognised over the customer 
                                                                                          relationship period.                    

2.3.1.3 Fixed-line          The group bundles voice,        Revenue relating to each      Fixed-line: 
        and Mobile          data and customer premises      item bundled together in      The group previously did not 
        customer            equipment together in its       a contract will be            recognise revenue allocated to 
        premises            post-paid contracts. Revenue    recognised based on the       equipment where the equipment
        equipment           related to the customer         allocated transaction         was provided to the customer      
                            premises equipment is           price. The transaction        as a "free" element of a      
                            recognised once control         price will be allocated       bundle. The adoption of IFRS        
                            of the equipment has been       based on the relative         15 has resulted in a portion      
                            transferred to the              stand-alone selling price     of the service revenue          
                            customer. Customers             of each item in the           attributable to the "free"    
                            settle the obligation           bundle. The group has         elements in fixed-line      
                            relating to the equipment       elected to apply the          contracts being recognised     
                            over the contract term.         practical expedient           upfront as opposed to being    
                            The term is usually in          to not recognise a            recognised over the contract   
                            excess of 12 months.            significant financing         term. This has resulted in      
                                                            component for any contract    an increase in customer 
                                                            which is less than            premises equipment revenue 
                                                            12 months. Where the          and a reduction in service 
                                                            contract term exceeds         revenue.                        
                                                            12 months, a portion of                         
                                                            the transaction price         Mobile:                       
                                                            allocated to customer         The group has historically 
                                                            premises equipment will       been allocating revenue 
                                                            be recognised as              primarily to the main data, 
                                                            significant financing         voice and equipment elements 
                                                            component revenue             in a contract. Revenue was not
                                                            over the contract term.       previously allocated to a              
                                                                                          financing component. The              
                                                                                          adoption of IFRS 15 has              
                                                                                          resulted in a reduction in              
                                                                                          customer premises equipment
                                                                                          revenue as a larger portion      
                                                                                          of the total transaction price  
                                                                                          is now allocated to service
                                                                                          related revenue as well as                
                                                                                          the recognition of a significant                 
                                                                                          financing component.                             

2.3.1   Adoption of IFRS 15 Revenue from contracts with customers (continued)
        The following accounting policies are applicable to revenue recognition and the related disclosures following 
        the adoption of the new standard:

        Deferred contract costs
        Deferred expense assets are disclosed as part of other receivables and amortised over the contract term. 
        The amortised costs are included as part of cost of contracts with customers or other operating expenses 
        as determined by the costs of contracts with customers policy.

        Significant financing component
        A model was designed to determine whether a significant financing component exists. This model calculates 
        the financing component on a contract-by-contract basis. If the financing component is less than 5% of 
        the total transaction price allocated to the customer premises equipment, it is deemed not to be 
        significant and the finance component will not be recognised separately.

2.3.2   Adoption of IFRS 9 Financial Instruments
        The new standard includes the final classification and measurement model for financial assets and 
        liabilities as well as the new expected credit loss (ECL) model for the impairment of financial assets 
        that replaces the incurred loss model prescribed in IAS 39. The IAS 39 classification model for financial 
        liabilities has been retained, however changes in own credit risk will be presented in other comprehensive 
        income for liabilities designated at fair value through profit or loss. IFRS 9 also includes new requirements 
        for general hedge accounting.

        Initial classification and measurement
        The group has assessed the implications and concluded that the new standard has no impact on the initial 
        classification and measurement of financial instruments.

        Impairment
        IFRS 9 requires the group to record expected credit losses on all of its debt securities, loans, trade 
        receivables and finance receivables, either on a 12-month or lifetime basis.
        
        The group has elected the simplified approach to recognise lifetime expected losses for its trade and finance 
        lease receivables and contract assets as permitted by IFRS 9. The group has assessed and concluded that due 
        to the short-term nature of its trade and other receivable balances, the trade receivable balances are not 
        significantly exposed to the impact of changes in the macro-economic environment. The provision model will 
        therefore not include economic environmental changes as assumptions applied in deriving the expected loss 
        on its trade, other receivables and finance lease receivables.

        The group has historically been raising provisions for bad debt based on incurred losses. Impairments 
        of all other financial assets that are not measured using the simplified approach will be calculated as 
        the difference between the carrying value of the asset and the present value of the expected cashflows, 
        discounted at the original effective interest rate of the instrument.
        
        Impairment losses calculated using the simplified approach are calculated using a provision matrix. 
        The provision matrix is a probability weighted model which applies an expected loss percentage, based 
        on the net write-off history experienced on receivables, to each ageing category of receivables at the 
        end of each month in order to calculate the total provision to be raised on the receivable balances.

        Receivables have been grouped together based on similar credit characteristics and a separate expected 
        loss provision matrix has been calculated for each of the categories based on the net loss history 
        associated to the specific category of receivable.

        Hedge accounting
        Subsequent to making the decision which informed the transition disclosures in the 31 March 2018 financial 
        statements, the group has elected to apply the practical expedient included in IFRS 9 to continue to apply 
        hedge accounting in accordance with the requirements of IAS 39.

        Transition
        The group is applying IFRS 9 retrospectively, applying the practical expedients relating to the accounting for 
        expected credit losses, in terms of which the opening balance of retained earnings has been adjusted in the 
        current financial period.

        The impairment loss on trade receivables was previously recognised where it was assessed that the receivable 
        was impaired. The impairment was based on an assessment of the extent to which customers had defaulted on 
        payments due and an assessment of their ability to make payments based on their creditworthiness and 
        historical write-offs experience. The adoption of IFRS 9 has resulted in a reduction of the allowance 
        for credit losses of R61 million due to a lower estimated loss based on the revised model.

2.4     Prior period error - mobile CPE revenue recognition
        As part of the IFRS 15 implementation process, the group reassessed the revenue recognition principles and 
        the judgement applied to mobile CPE sales to independently owned dealer stores. It was identified that upon 
        transfer of a device to a dealer, revenue was recognised relating to the sales of devices. At this point the 
        group would also recognise the cost of sale relating to the inventory transferred to the dealer.       

        Subsequent to this transaction, in the event where a device would be bundled with a post-paid mobile contract, 
        Telkom would recognise revenue again as a second transaction relating to the device sold with the post-paid 
        contract.
        
        At this point the group would reimburse the dealer for the device and recognise the cost of reimbursement as 
        a cost of sale transaction. The accounting treatment adopted resulted in the overstatement of operating 
        revenue and corresponding cost of sales.
        
        There was however no material impact on the net operating revenue, EBITDA, profit before tax or basic 
        earnings per share and headline earnings per share. The previous accounting treatment had no impact on 
        the statement of financial position as it only resulted in an overstatement of the revenue and cost of 
        sales line items respectively.

        Taking into account the agent versus principal rules defined in IFRS 15, the accounting treatment for the 
        current period has been corrected to only reflect a device sale once the device has been sold outright to 
        an end customer or been bundled in a post-paid contract.

        The tables below reflect the adjustments for each materially affected line item as part of the adoption 
        of the new standards and the correction of the prior period error. The adjustments to each affected sub-total 
        and total line item on the financial statements have also been included. All unaffected line items making up 
        these total balances have not been disclosed.

2.5     Adjustment to the condensed consolidated interim statement of profit or loss and other comprehensive income

                                                            Six months ended 30 September 2017
                                                As previously                  Mobile CPE                    
                                                     reported      IFRS 15    restatement       Restated     
                                                           Rm           Rm             Rm             Rm    
        Operating revenue                              20 109          (41)          (250)        19 818    
          Voice**                                       6 983          (59)             -          6 924    
          Interconnection**                               388            -              -            388    
          Data*                                         6 507           78              -          6 585    
          Customer premises equipment**                 1 766         (126)          (250)         1 390    
          Significant financing component**                 -           66              -             66    
          Sundry revenue                                  813            -              -            813    
          Information technology                        3 652            -              -          3 652    
        Payments to other operators                     1 172            -              -          1 172    
        Costs of contracts with customers               3 146          (10)          (250)         2 886    
        Net operating revenue                          15 791          (31)             -         15 760    
          Basic earnings per share (cents)              316.9         (6.0)             -          310.9    
          Diluted earnings per share (cents)            311.9         (6.0)             -          305.9    
         * Includes an R8 million restatement relating to installation fees. Refer to note 2.3.1.2 and 2.3.1.3.
        ** Refer to note 2.3.1.3.

2.6     Adjustments to the condensed consolidated interim statement
        of financial position
                                                       As at 31 March 2018                       As at 1 April 2017
                                                As previously                          As previously            Restated     
                                                     reported   IFRS 15    Restated         reported  IFRS 15         Rm    
                                        Notes              Rm        Rm           Rm              Rm       Rm               
        Assets                                                                                                              
        Current assets                                 14 127       (44)      14 083          13 912      (60)    13 852    
          Contract assets                  19               -     1 425        1 425               -      960        960    
          Trade and other                                                                                      
        receivables                        19           8 126    (1 469)       6 657           8 156   (1 020)     7 136    
        Total assets                                   50 544       (44)      50 500          48 049      (60)    47 989    
                                                                                                                            
        Equity and liabilities                                                                                              
        Equity attributable to                                                                                 
        owners of the parent                           27 026       (90)      26 936          27 569      (61)    27 508    
        Retained earnings                              20 020       (90)      19 930          20 533      (61)    20 472    
          Deferral of incremental                                                                              
          contract costs              2.3.1.1               -       149            -               -      118          -    
          Deferral of installation                                                                           
          fee revenue                 2.3.1.2               -       (46)           -               -       (1)         -    
          Earlier recognition of                                                                               
          fixed-line customer        
          premises equipment revenue 
          and recognition of                                                                   
          significant financing      
          component                   2.3.1.3               -        32            -               -       27          -    
          Lower recognition of       
          mobile customer                                                                 
          premises equipment revenue                                                                           
          and recognition of         
          significant financing      
          component                   2.3.1.3               -      (225)           -               -     (205)         -    
        Total equity                                   27 385       (90)      27 295          27 906      (61)    27 845    
        Non-current liabilities                        10 240        38       10 278           7 004        -      7 004    
        Deferred revenue                                  464        38          502             529        -        529    
        Current liabilities                            12 919         8       12 927          13 139        1     13 140    
        Current portion of                                                                                     
        deferred revenue                                1 589         8        1 597           1 570        1      1 571    
                                                                                                                            
        Total liabilities                              23 159        46       23 205          20 143        1     20 144    
        Total equity and liabilities                   50 544       (44)      50 500          48 049      (60)    47 989    

2.7     Standards and interpretations in issue not yet adopted and not yet effective
        Information on standards issued by the IASB, but not effective for the current financial year, has been provided 
        below where it is expected that the new standards will have a material impact on the group.

        Management anticipates that all relevant pronouncements will be adopted in the group's accounting policies for 
        the first period beginning after the effective date of the pronouncement. New standards, interpretations and 
        amendments neither adopted nor listed below are not expected to have a material impact on the group's 
        financial statements.

        The following new standard in issue has not yet been adopted and is not yet effective. The standard is effective 
        for the 31 March 2020 financial period.

2.7.1   IFRS 16 Leases
        IFRS 16 Leases, issued by the IASB in January 2016, is effective for reporting periods beginning on, or after,
        1 January 2019.

        IFRS 16 Leases sets out the principles for the recognition, measurement, presentation and disclosure of leases. 
        The standard introduces a single lessee accounting model and requires a lessee to recognise assets and 
        liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value.
        A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased 
        asset and a lease liability representing its obligation to make lease payments.

        IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17. Accordingly, a lessor 
        continues to classify its leases as operating leases or finance leases, and to account for those two types 
        of leases differently. The standard will affect primarily the accounting for the group's operating leases.

        In the case where the group is a lessee, the long term operating leases will be recognised as non-current 
        assets and financial liabilities in the statement of financial position. In the statement of comprehensive 
        income, the lease expense profile will be front-loaded for individual leases and presented as depreciation 
        and interest rather than as an operating expense (with the exception of variable rentals which will be 
        expensed as incurred). This will result in many of the group's key performance indicators being affected 
        - EBITDA being a case in point. The statement of cash flows will be affected too, with payments needing 
        to be split between repayments of principal and interest.

        The group is currently assessing the effects of IFRS 16 and cannot provide an estimate of the effects of the 
        new lease standard until a detailed review has been performed.

        The group is planning to adopt the standard by processing a cumulative adjustment to retained earnings as  
        at 1 April 2019 and recognising the respective right-of-use assets and liabilities at that date. The group 
        will also adopt the practical expedient in IFRS 16 to apply the new standard to all contracts being 
        accounted for under IAS 17 and IFRIC 4 at 1 April 2019 and to apply the principles outlined in IFRS 16 
        for identifying a lease to all new contracts entered into after that date.

3.      Segment information
        The executive committee (Exco) is the group's chief operating decision maker (CODM). Management has 
        determined the operating segments based on the reports reviewed by Exco that are used to make strategic 
        decisions, allocate resources and assess performance of each reportable segment.

        The CODM reviews the performance of the operating segments on a net operating revenue and EBITDA basis. 
        For this purpose, the reportable segments have been determined as Openserve, Consumer, BCX and "Other".

        During the prior interim period, the reportable segments were determined as Fixed Stream, Mobile Stream, 
        BCX and "Other" for EBITDA. In the current period, the review of EBITDA has been performed at the same 
        segmental level as net operating revenue. The comparative segment note has been restated to reflect 
        this change.

        The EBITDA balance referred to above is adjusted to include the significant financing component recognised 
        in accordance with IFRS 15 Revenue from contracts with customers. The significant financing component is 
        included in operating revenue as a separate component of revenue.

        "Other" includes Swiftnet, Yellow Pages, Gyro Group and other business units.

        In the current period, the CODM has also included intercompany revenue and transfer pricing (excluded from 
        the performance measures assessed by the CODM during the previous interim period) in the measure of 
        performance used to assess performance and allocate resources. The comparative segment note has been 
        restated to include transfer pricing.
        
        The current period EBITDA for segmental purposes has been normalised for the following:
        - Voluntary severance and retirement expenses of R282 million.
                                                   Openserve    Consumer      BCX    Other    Consolidated          
        September 2018                                    Rm          Rm       Rm       Rm              Rm          
        Revenue from contracts                                                              
        with external customers*                       2 159       8 876    9 089      723          20 847          
        Revenue recognised over time                                                                                
                                                                                                                    
          Voice                                            -       3 348    2 897        -           6 245          
          Interconnection                                410         121        -        -             531          
          Data                                         1 697       4 166    1 695        -           7 558          
          Information technology                           -           -    3 774        -           3 774          
          Significant financing component revenue          -          75        -        -              75          
        Revenue recognised at a point in time                                                                       
          Customer premises equipment                      -       1 156      623       68           1 847          
          Sundry revenue                                  52          10      100      655             817          
                                                                                                                    
        Payments to other operators                     (441)       (806)     (38)       -          (1 285)         
        Costs of contracts with customers                 (3)     (1 835)  (1 154)    (184)         (3 176)         
        Segment net external operating revenue         1 715       6 235    7 897      539          16 386          
        Intersegmental operating revenue               6 506         180    1 133    1 204           9 023          
        Adjusted earnings before interest,                                                  
        tax, depreciation and amortisation                                                  
        (EBITDA) for reportable segments                                                    
        including intersegmental transactions          2 589         202    1 361    1 168           5 320          
        Reconciliation of operating profit                                                  
        to profit before tax                                                                
        Normalisations                                                                                              
        Voluntary severance and retirement                                                  
        package expenses                                                                             (282)         
        Adjusted earnings before interest,                                                  
        tax, depreciation and amortisation                                                  
        (EBITDA) for reportable segments                                                             5 038          
        Depreciation, amortisation, impairments/                                            
        (reversals), write-offs and losses                                                          (2 802)         
        Operating profit                                                                             2 236          
        Investment income and income from associates                                                   120          
        Finance charges and fair value movements                                                      (443)         
        Profit before taxation                                                                       1 913          
        Other segment information                                                                                   
        Capital expenditure of property, plant                                              
        and equipment and intangible assets            1 649       1 354      106      167           3 276          
        * Revenue includes balances generated by subsidiaries of BCX in countries outside of South Africa.  
          These are however not considered material to the group and are thus not disclosed separately.

                                                 Openserve**  Consumer**    BCX**  Other**  Consolidated**          
        September 2017                                    Rm          Rm       Rm       Rm              Rm          
        Revenue from contracts with                                                         
        external customers*                            2 045       7 702    9 301      770          19 818          
        Revenue recognised over time                                                                                
                                                                                                                    
          Voice                                            -       3 557    3 367        -           6 924          
          Interconnection                                325          63        -        -             388          
          Data                                         1 686       3 136    1 763        -           6 585          
          Information technology                           -           -    3 652        -           3 652          
          Significant financing component revenue          -          66        -        -              66          
        Revenue recognised at a point in time                                                                       
          Customer premises equipment                      -         872      518        -           1 390          
          Sundry revenue                                  34           8        1      770             813          
                                                                                                                    
        Payments to other operators                     (568)       (555)     (49)       -          (1 172)         
        Costs of contracts with customers                (44)     (1 312)  (1 307)    (223)         (2 886)         
        Segment net external operating revenue         1 433       5 835    7 945      547          15 760          
        Intersegmental operating revenue               6 544         198    1 384    2 240          10 366          
        Adjusted earnings before interest,                                                  
        tax, depreciation and amortisation                                                  
        (EBITDA) for reportable segments                                                    
        including intersegmental transactions          2 401         (41)   1 964      846           5 170          
        Reconciliation of operating profit                                                  
        to profit before tax                                                                
        Adjusted earnings before interest,                                                  
        tax, depreciation and amortisation                                                  
        (EBITDA) for reportable segments                                                             5 170          
        Depreciation, amortisation,                                                         
        impairments/(reversals),                                                            
        write-offs and losses                                                                       (2 660)         
        Operating profit                                                                             2 510          
        Investment income and income from associates                                                    64          
        Finance charges and fair value movements                                                      (352)         
        Profit before taxation                                                                       2 222          
        Other segment information                                                                                   
        Capital expenditure of property,                                                    
        plant and equipment and intangible assets      2 295       1 185      262      232           3 974          

        Entity wide disclosures
        All material non-current assets other than financial instruments, deferred tax assets, post-employment benefit 
        assets, and rights arising under insurance contracts related to the segments above are located in South Africa. 
        Assets associated to the subsidiaries of BCX outside of South Africa are not considered material to the group 
        as a whole.

        No single customer contributes more than 10% of the revenue from external customers and thus no specific 
        information related to major customers is included in the segment information above.

        For the purpose of assessing revenue contribution per customer, management does not treat Government as a 
        single customer.
         * Revenue includes balances generated by subsidiaries of BCX in countries outside of South Africa. These are 
           however not considered material to the group and are thus not disclosed separately.
        ** Restated. Refer to note 2.3, 2.4 and 2.5.

                                                                           Reviewed Six       Reviewed Six     
                                                                           months ended       months ended     
                                                                           30 September       30 September    
                                                                                   2018               2017    
                                                                                     Rm                 Rm    
4.      Operating expenses                                                                                
        Employee expenses                                                         5 569              5 360    
        Included in the employee expenses is 
        a R282 million (30 September 2017: Rnil) 
        provision for voluntary severance and 
        retirement packages.                                          
        Depreciation, amortisation, 
        impairments/(reversals), write-offs and losses                            2 802              2 660    
        Depreciation of property, plant and equipment                             2 363              2 336    
        Amortisation of intangible assets                                           353                359    
        Write-offs, impairments/(reversals)                                    
        and losses of property, plant and                                      
        equipment and intangible assets                                              86                (35)   

        During the period, the group reassessed the useful lives on certain technologies. The reassessment 
        takes into account the group's current CAPEX strategy and changes in the technological environment. 
        The reassessment of useful lives had the net effect of decreasing the depreciation expense for the 
        period ended 30 September 2018 by R236 million (30 September 2017: R91 million decrease in depreciation 
        and amortisation). Depreciation for the remaining useful life of the group's assets will be increased 
        by this amount.

        Provision for credit losses
        The group accounts for specific provisions for credit losses where there are indicators of impairment 
        identified relating to a trade receivable balance. For the period under review the group reassessed 
        provisions raised at 31 March 2018. The expected losses, based on management's best estimate in the 
        previous reporting period have not materialised as expected and management has subsequently reversed 
        the provision for credit losses raised on these specific debtors. This has resulted in a reduction in 
        the provision for credit losses expense of R157 million in the current period.

                                                                           Reviewed Six       Reviewed Six     
                                                                           months ended       months ended     
                                                                           30 September       30 September    
                                                                                   2018               2017    
                                                                                     Rm                 Rm    
5.      Taxation                                                                    494                594    
        Normal company taxation                                                     427                622    
        Deferred taxation                                                            67                (33)   
        Foreign tax                                                                   -                  5    

        The taxation expense is recognised based on management's estimate of the weighted average effective 
        annual income tax rate expected for the full financial year. The estimated average tax rate used for 
        the period ended 30 September 2018 is 25.9%, compared to 26.7% for the period ended 30 September 2017.

                                                                           Reviewed Six       Restated Six     
                                                                           months ended       months ended     
                                                                           30 September       30 September    
                                                                                   2018               2017    
                                                                                     Rm                 Rm    
6.      Earnings per share                                                                                    
        Total operations                                                                                      
        Basic earnings per share (cents)*                                         276.0              310.9    
        Diluted earnings per share (cents)*                                       272.1              305.9    
        Headline earnings per share (cents)*                                      288.0              297.8    
        Diluted headline earnings per share (cents)*                              284.0              293.1    
        Reconciliation of weighted average                        
        number of ordinary shares:                                            Number of          Number of     
                                                                                 shares             shares    
        Weighted ordinary shares in issue                                   511 140 239        526 948 700    
        Weighted average number of treasury shares                          (13 629 708)       (14 869 186)   
        Weighted average number of shares outstanding                       497 510 531        512 079 514    
        Reconciliation of diluted weighted average                
        number of ordinary shares:                                 
        Weighted average number of shares outstanding                       497 510 531        512 079 514    
        Expected future vesting of shares                                     7 031 347          8 268 074    
        Diluted weighted average number of shares outstanding               504 541 878        520 347 588    
        *  The disclosure of headline earnings is a requirement 
        of the JSE Limited and is not a recognised measure 
        under IFRS. It has been calculated in accordance with 
        the South African Institute of Chartered Accountants' 
        circular 4/2018 issued in this regard.
        Total operations                                              
        Reconciliation between earnings and headline earnings:                                                
        Profit for the period                                                     1 419              1 628    
        Non-controlling interests                                                   (46)               (36)   
        Profit attributable to owners of Telkom                                   1 373              1 592    
        Profit on disposal of property, plant and equipment 
        and intangible assets                                                       (20)               (32)   
        Write-offs, impairments/(reversals) and losses of 
        property, plant and equipment and intangible assets                          86                (35)   
        Taxation effects**                                                           (6)                 -    
        Headline earnings                                                         1 433              1 525    
        Dividend per share (cents)                                               236.73             291.00    
        The calculation of dividend per share is based on total dividends of R1 210 million declared on 
        28 May 2018 (30 September 2017: R1 532 million). 511,140,239 number of ordinary shares were outstanding 
        on the date of the dividend declaration (30 September 2017: 526,948,700). Total dividends declared as 
        per the statement of changes in equity for the period includes R32 million (30 September 2017: R70 million) 
        relating to dividends declared to non-controlling interests of Yellow Pages and the BCX group.
        ** The taxation impact consists of a R6 million increase (30 September 2017: Rnil) in tax expense related 
        to recoupment of tax on write-offs of property, plant and equipment and intangible assets.

                                                                               Reviewed Six        Audited     
                                                                               months ended       Year end     
                                                                               30 September       31 March    
                                                                                       2018           2018    
                                                                                         Rm             Rm    
7.      Capital additions and disposals                                                                       
        Property, plant and equipment                                                                         
        Additions                                                                     2 913          7 416    
        Disposals                                                                       (17)           (19)   
                                                                                      2 896          7 397    
        Intangible assets                                                                                     
        Additions                                                                       363            493    
        Disposals                                                                        (3)            (4)   
                                                                                        360            489    

        Finance charges of R32 million (31 March 2018: R135 million) were capitalised to property, plant and 
        equipment in the current financial period.

                                                                               Reviewed Six        Audited     
                                                                               months ended       Year end     
                                                                               30 September       31 March    
                                                                                       2018           2018    
                                                                                         Rm             Rm    
8.      Employee benefits                                                                                     
                                                                                        752            627    
        Telkom Pension Fund asset                                                        23             22    
        Post retirement medical aid net plan asset                                      729            605    
                                                                                                              
        The balances recognised for the employee benefit assets have been calculated taking into account the 
        actuarially determined asset ceiling in terms of IAS 19.

                                                                               Reviewed Six        Audited     
                                                                               months ended       Year end     
                                                                               30 September       31 March    
                                                                                       2018           2018    
                                                                                         Rm             Rm    
9.      Other financial assets, liabilities and investments                                                   
        Non-current other investments:                                                   73            100    
          FutureMakers*                                                                  63             50    
          Equity investment in Number Portability Company**                               6              6    
          BCX group interest in associates and joint ventures**                           4             44    
        Current other investments at fair value:                                                              
        Investment in Cell Captive                                                    1 530          1 509    
                                                                                                              
        Non-current other financial assets consist of:                                  125             60    
          Asset finance receivables                                                     125             29    
          NGA loans                                                                       -             31    
        Current portion of other financial assets at fair value:                                              
        - Derivative instruments                                                        378            163    
          Forward exchange contracts                                                    200             14    
          Firm commitments                                                              156            149    
          Interest rate swaps                                                            22              -    
        - Asset finance receivables                                                      48              -    
                                                                                                              
        Non-current other financial liabilities consist of:                                                   
        Asset finance payables                                                          (96)             -    
        Current other financial liabilities at fair value:                                                    
        - Derivative instruments                                                       (186)          (250)   
          Forward exchange contracts                                                    (29)          (222)   
          Firm commitments                                                             (149)            (5)   
          Interest rate swaps                                                            (8)           (23)   
        - Asset finance payables                                                        (37)             -    
         * Accounted for at fair value.                                                              
        ** Equity accounted.                                                                         

        Derivatives not designated as hedging instruments                                             
        The group uses forward exchange contracts and interest rate swaps to economically hedge its foreign 
        exchange and interest rate exposures.                                      

        Derivative instruments are measured at fair value through profit or loss.

9.      Other financial assets, liabilities and investments (continued)
        Fair value hedge
        The foreign exchange forward contracts designated as fair value hedges, are being used to hedge the 
        exposure to changes attributable to movement in the spot exchange rate of its firm commitments.

        An increase in fair value of the forward exchange contracts, designated as fair value hedges, of 
        R270 million (31 March 2018: decrease of R319 million) has been recognised in finance charges and fair 
        value movements and offset with a similar loss (31 March 2018: gain) on the hedged items (property, 
        plant and equipment and inventory).     

                                                                                   Reviewed                    
                                                                                 Six months        Audited     
                                                                                      ended       Year end    
                                                                               30 September       31 March    
                                                                                       2018           2018    
                                                                                         Rm             Rm    
10.     Inventories                                                                   1 384          1 435    
        Gross inventories                                                             1 559          1 643    
        Write-down of inventories to net realisable value                              (175)          (208)   

                                                                                   Reviewed                    
                                                                                 Six months        Audited     
                                                                                      ended       Year end     
                                                                               30 September       31 March    
                                                                                       2018           2018    
                                                                                         Rm             Rm    
11.     Net cash and cash equivalents                                                                         
          Cash disclosed as current assets                                            2 314          2 728    
          Cash and bank balances                                                      1 557          1 669    
          Short-term deposits                                                           757          1 059    
        Credit facilities utilised                                                        -            (30)   
        Net cash and cash equivalents                                                 2 314          2 698    
        Undrawn borrowing facilities                                                  6 250          5 250    
                                                                                                              
        The undrawn borrowing facilities are unsecured and bear interest at a rate that will be mutually 
        agreed between the borrower and lender at the time of drawdown. These facilities are subject to 
        annual review and are in place to ensure liquidity. At 30 September 2018, R5.5 billion 
        (31 March 2018: R4.5 billion) of these undrawn facilities were committed.
                                                                             
                                                                                   Reviewed                    
                                                                                 Six months        Audited     
                                                                                      ended       Year end     
                                                                               30 September       31 March    
                                                                                       2018           2018    
                                                                                         Rm             Rm    
12.     Deferred taxation                                                                                     
        Deferred taxation balance is made up as follows:                                 26            320    
        Deferred taxation assets                                                        189            499    
        Deferred taxation liabilities                                                  (163)          (179)   
                                                                                                              
        The decrease in the deferred tax balance in the current period is attributable to a R225 million 
        additional liability raised in Telkom SA SOC Limited relating to the actuarial gains recognised 
        on the post-employment benefit plans. This movement was accounted for in other comprehensive income. 
        An additional R86 million decrease in the deferred tax asset was accounted for in the taxation 
        expense relating to the utilisation of temporary differences in the holding company financial 
        records.

        At 31 March 2018, the group did not recognise deferred tax of R335 million in respect of temporary 
        differences and tax losses amounting to R1 200 million that could be carried forward against future 
        taxable income. These differences originated in Telkom company in the prior year. There was no 
        unrecognised deferred tax asset at 30 September 2018.

        The adoption of IFRS 15 Revenue from contracts with customers and IFRS 9 Financial instruments 
        has had no impact on the deferred tax asset position as a result of the limitation of the deferred 
        tax asset applied in the Telkom company results.

13.     Financial risk management
        Exposure to continuously changing market conditions has made management of financial risk critical for 
        the group. Treasury policies, risk limits and control procedures are continuously monitored by the Board 
        of Directors through its Audit and Risk Committees.

13.1    Liquidity risk
        Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall 
        due. The group is exposed to liquidity risk as a result of variable cash flows and capital commitments.

        Liquidity risk is managed by the group's Treasury department in accordance with policies and guidelines 
        formulated by the group's Executive Committee. In terms of its borrowing requirements, the group ensures 
        that sufficient facilities exist to meet its immediate obligations.

        Compared to the 31 March 2018 financial year end, there was no material change in the contractual 
        undiscounted cash out flows for financial liabilities.

        As at 30 September 2018, the contractual maturities of the group's financial liabilities were as follows:
                                                                       Total                                      
                                                      Carrying   contractual   0 - 12    1 - 2   2 - 5     > 5  
                                                        amount    cash flows   months    years   years   years    
        September 2018                         Notes        Rm            Rm       Rm       Rm      Rm      Rm    
        Non-derivative                                                                  
        financial liabilities                                                                          
        Interest-bearing debt                                                           
        (excluding finance leases)                15    10 065        10 325    2 703    3 100   2 222   2 300    
        Trade and other payables                  17     7 476         7 476    7 476        -       -       -    
        Finance lease liabilities                 15        78            78       39       39       -       -    
        Shareholders for dividend                           60            60       60        -       -       -    
        Derivative financial liabilities                                                                          
        Interest rate swaps                        9         8             8        8        -       -       -    
        Firm commitments                           9       149           149      149        -       -       -    
        Forward exchange contracts                 9        29            29       29        -       -       -    
                                                        17 865        18 125   10 464    3 139   2 222   2 300    

                                                                       Total                                       
                                                      Carrying   contractual   0 - 12    1 - 2   2 - 5     > 5     
                                                        amount    cash flows   months    years   years   years     
        March 2018                             Notes        Rm            Rm       Rm       Rm      Rm      Rm     
        Non-derivative 
        financial liabilities
        Interest-bearing debt                                    
        (excluding finance leases)                15     9 320         9 672    2 204    3 657   2 001   1 810    
        Credit facilities utilised                11        30            30       30        -       -       -    
        Trade and other payables                  17     6 878         6 878    6 878        -       -       -    
        Finance lease liabilities                 15        92            92       43       49       -       -    
        Shareholders for dividend                           58            58       58        -       -       -    
        Derivative financial liabilities                                                                          
        Interest rate swaps                        9        23            23       23        -       -       -    
        Firm commitments                           9         5             5        5        -       -       -    
        Forward exchange contracts                 9       222           222      222        -       -       -    
                                                        16 628        16 980    9 463    3 706   2 001   1 810    

13.2    Fair value of financial instruments
        Valuation techniques and assumptions applied for the purposes of measuring fair value:
                                          Fair value at
                                           30 September
        Type of financial                          2018    Valuation                   Significant     
        instrument - group                           Rm    technique                   inputs
        Derivative assets                           378    Discounted cash flows       Yield curves    
                                                                                       Market interest rates    
        Derivative liabilities                    (186)                                Market foreign exchange rates    
                                                                                      
                                                           Quoted market prices       
                                                           adjusted for               
        Investment in Cell Captive assets         1 530    counterparty credit risk    Market prices    

                                                                                       Cash flow forecasts
                                                           Discounted                  and market related
        Investment in FutureMakers                   63    cash flows                  discount rates    

                                                           Discounted cash flows       Market interest rate
        Interest-bearing debt                   (10 371)   and quoted bond prices      Market foreign exchange rate    

        The estimated net fair values as at the reporting date have been determined using available market 
        information and appropriate valuation methodologies as outlined above. This value is not necessarily 
        indicative of the amounts that the group could realise in the normal course of business. The fair 
        values of the financial assets and financial liabilities are sensitive to exchange rate and interest 
        rate movements.

        Derivatives are recognised at fair value. The fair values of derivatives are determined using quoted 
        prices or, where such prices are not available, a discounted cash flow analysis is used. These amounts 
        reflect the approximate values of the net derivative position at the reporting date.

        The fair values of the borrowings disclosed above are based on quoted prices or, where such prices 
        are not available, the expected future payments discounted at market interest rates. As a result, 
        they differ from their carrying values.

        The fair value of financial instruments is included at the price that would be received to sell an 
        asset or paid to transfer a liability in an orderly transaction between market participants at the 
        measurement date, or in its absence, the most advantageous market to which the group has access at 
        that date. The fair value of a liability reflects its non-performance risk. The fair value of cash 
        and short-term deposits, trade and other receivables, finance leases, shareholders for dividend and 
        trade and other payables approximate their carrying amounts largely due to the short-term maturities 
        of these instruments and market related interest rates included in finance lease receivables. 
        Long-term receivables and borrowings are evaluated by the group based on parameters such as 
        interest rates, specific country factors and the individual creditworthiness of the customer. 
        Based on this evaluation, allowances are taken into account for the expected losses of these 
        receivables. As at the reporting date, the carrying amount of such receivables, net of allowances, 
        are not materially different from their calculated fair values. Fair values of quoted bonds are 
        based on price quotations at the reporting date.

13.3    Fair value hierarchy
        The table below analyses financial instruments carried at fair value and amortised cost, by 
        valuation method.                                                     

        The different levels have been defined as follows:
        a) Quoted prices in active markets for identical assets or liabilities (level 1).
        b) Inputs other than quoted prices, that are observable for the asset or liability (level 2).
        c) Inputs for the asset or liability that are not based on observable market data (level 3).

                                                                                       Reviewed                    
                                                                                     Six months        Audited     
                                                                                          ended       Year end     
                                                                                   30 September       31 March    
                                                                   Hierarchy               2018           2018    
                                                                      levels*                Rm             Rm    
        Assets measured at fair value                                                                             
          Investment in Cell Captive preference shares                Level 2             1 530          1 509    
          Investment made by FutureMakers                             Level 3                63             50    
          Forward exchange contracts                                  Level 2               200             14    
          Interest rate swaps                                         Level 2                22              -    
          Firm commitments                                            Level 2               156            149    
        Liabilities measured at fair value                                                                        
          Forward exchange contracts                                  Level 2              (29)          (222)    
          Interest rate swaps                                         Level 2               (8)           (23)    
          Firm commitments                                            Level 2             (149)            (5)    
          Liabilities measured at amortised cost                                                                  
        Interest-bearing debt consisting of:                                                                      
          Listed debt                                                 Level 2          (10 371)        (9 694)    
        * There have been no transfers between the fair value levels in the period under review.

14.     Acquisition and disposal of subsidiaries
14.1    Subsidiaries classified as held for sale in the period
        In the prior period BCX initiated a review of its investment portfolio. At 31 March 2018, management 
        had identified its full African portfolio and the Smart Office Connexion group as held for sale.
        
        During the current period management reversed the decision to dispose of its African subsidiaries in 
        the Southern African Development Community (SADC). The investment in Nigeria and Tanzania remains 
        classified as held for sale.
        
        The mandate provided to management by the Board to dispose of the Smart Office Connexion group expired 
        in June 2018. Management has continued with the negotiations regarding the sale and will be resubmitting 
        a proposal for the approval to continue with sale negotiations. The conclusion of the sale is no longer 
        considered highly probable within the next 12 months and the assets are no longer classified as 
        held for sale.    

        The remaining investments classified as held for sale are immaterial to the financial statements as 
        a whole and have not been disclosed separately on the statement of financial position and statement 
        of profit or loss and other comprehensive income.

                                                                                                         Rm    
14.     Acquisition and disposal of subsidiaries (continued)                                                   
14.1    Subsidiaries classified as held for sale in the period (continued)                                     
        African subsidiaries                                                                                   
        Revenue                                                                                         161    
        Expenses                                                                                       (165)   
        Net finance costs and fair value movements                                                       (7)   
        Loss before tax                                                                                 (11)   
        Taxation                                                                                         (1)   
        Loss for the period                                                                             (12)   
        Total non-current assets                                                                         29    
        Total current assets                                                                            150    
        Total non-current liabilities                                                                     4    
        Total current liabilities                                                                       102    
        
        The assets above have been revalued to the lower of the carrying value at the date of classification as 
        held for sale and the fair value less costs to sell in the prior period.                
        
        There was no additional impairment loss recognised on these assets in the current financial period.
        
                                                                                    Reviewed                    
                                                                                  Six months        Audited     
                                                                                       ended       Year end     
                                                                                30 September       31 March    
                                                                                        2018           2018    
                                                                                          Rm             Rm    
15.     Interest-bearing debt                                                                                  
        Non-current interest-bearing debt                                              7 401          7 165    
        Local debt                                                                     7 237          7 005    
        Foreign debt                                                                     125            111    
        Finance leases                                                                    39             49    
        Current portion of interest-bearing debt                                       2 742          2 247    
        Local debt                                                                     2 700          2 200    
        Foreign debt                                                                       3              4    
        Finance leases                                                                    39             43    

        The current portion of interest-bearing debt of R2 742 million (31 March 2018: R2 247 million) for group 
        as at 30 September 2018 is expected to be repaid from operational cash flow and other borrowings.
        
        During the period under review additional loans to the value of R1 500 million (30 September 2017: 
        R4 930 million) in the form of commercial paper were raised. No material transaction fees were raised 
        upon the issue of these debt instruments. The instruments have an average interest rate of 7.77% and 
        are repayable over an average term of 6 months.
                                                                            
                                                                                    Reviewed                    
                                                                                  Six months        Audited     
                                                                                       ended       Year end     
                                                                                30 September       31 March    
                                                                                        2018           2018    
                                                                                          Rm             Rm    
16.     Provisions                                                                                             
        Non-current employee related provisions                                          659          2 388    
          Subsidiary defined benefit plans                                                31             21    
          Telephone rebates                                                              409            402    
          Telkom Retirement Fund                                                         219          1 965    
        Current portion of employee related provisions                                 1 097          1 340    
          Annual leave                                                                   686            577    
          Post-retirement medical aid                                                      -              6    
          Telephone rebates                                                               39             39    
          Bonus and other benefits                                                       372            718    
        Non-current non-employee related provisions                                                            
         Other                                                                            42             44    
        Current portion of non-employee related provisions                                                     
         Other                                                                           197            164    

        Annual leave
        In terms of the group's policy, employees are entitled to accumulate vested leave benefits not taken 
        within a leave cycle, to a cap of 15-26 days (31 March 2018: 22-30 days) depending on the number of 
        years service, which must be taken within a 12-19 month (31 March 2018: 12-19 month) leave cycle. 
        The leave cycle is reviewed annually and is in accordance with legislation.

        Bonus and other benefits
        The bonus scheme consists of performance bonuses which are dependent on the achievement of certain 
        financial and non-financial targets. The bonus is payable annually to all qualifying employees after 
        the group's results have been made public, with a 14th cheque for a certain group of employees. Owing 
        to performance targets not being achieved at an interim date, management has not included any bonus 
        or 14th cheque provision in the interim results. The provision will be reassessed based on the financial 
        performance of the group in the second half of the financial year.

        During the period under review, the group initiated a voluntary severance and retrenchment process. 
        At reporting date a provision of R282 million relating to the scheme has been recognised 
        (30 September 2017: Rnil).

        Non-employee related provisions
        Other provisions relate to the ICASA licence fee provision, a restoration provision, provisions for legal
        matters and contingent consideration relating to prior year business combinations.

        Telkom Retirement Fund
        The decrease in the Telkom Retirement Fund obligation is primarily driven by the increase in the discount 
        rate from 8.80% to 9.90%. This resulted in an actuarial gain of R1 851 million.

                                                                                    Reviewed                    
                                                                                  Six months        Audited     
                                                                                       ended       Year end     
                                                                                30 September       31 March    
                                                                                        2018           2018    
                                                                                          Rm             Rm    
17.     Trade and other payables                                                       7 476          6 878    
          Trade and other payables                                                     3 055          3 273    
          Finance cost accrued                                                           183             74    
          Accruals                                                                     4 238          3 531    
        
        Accruals and other payables mainly represent licence fees and amounts payable for goods received, net 
        of Value Added Tax obligations.                                     
        
        Included in the current and prior year balance is the refund from SARS of R854 million and related 
        interest. Refer to note 20.

                                                                                    Reviewed                    
                                                                                  Six months        Audited     
                                                                                       ended       Year end     
                                                                                30 September       31 March    
                                                                                        2018           2018    
                                                                                          Rm             Rm    
18.     Commitments                                                                                            
          Capital commitments authorised                                               6 306          9 270    
          Commitments against authorised capital expenditure                           5 524          4 350    
          Authorised capital expenditure not yet contracted                              782          4 920    

        Capital commitments comprise of commitments for property, plant and equipment and software included 
        in intangible assets.                                     

        Management expects these commitments to be financed from internally generated cash and borrowings.
                                                                    
                                                                                    Reviewed                          
                                                                                  Six months       Restated           
                                                                                       ended       Year end           
                                                                                30 September       31 March          
                                                                                        2018           2018          
                                                                                          Rm             Rm          
19.     Trade and other receivables and contract assets                                7 716          6 657          
        Trade receivables                                                              6 732          4 949          
          Gross trade receivables                                                      7 346          5 787          
          Impairment of receivables                                                     (614)          (838)         

        Prepayments and other receivables                                                984          1 708          
                                                                                                                     
        Contract assets                                                                1 679          1 425          
          Gross contract assets                                                        1 801          1 520          
          Impairment of contract assets                                                 (122)           (95)         
                                                                                                                     
        Allowance account for credit losses                                              736            933          
        Opening balance as previously reported                                           933            596          
        Adoption of IFRS 9 financial instruments                                         (61)             -          
        Charged to selling, general and administrative              
        expenses (refer to note 4)                                                        53            644          
        Receivables written-off                                                         (189)          (307)         

        The repayment terms of trade receivables vary between 21 days and 45 days from date of invoice. Interest 
        charged on overdue accounts varies between a rate of prime and a rate of 18%, depending on the contract 
        terms.

20.     Contingencies
        CONTINGENT LIABILITIES
        Other than the disclosures below, there have been no significant movement noted on the contingent positions 
        as reported in the 31 March 2018 financial statements.

        HIGH COURT
        Radio Surveillance Security Services (Pty) Ltd (RSSS)
        In December 2011, RSSS served a summons on Telkom for the sum of R216 million. Telkom defended the matter. 
        The trial was finalised in March 2018. Judgement was granted in April 2018. The claim of RSSS was dismissed 
        with costs. RSSS made an application for leave to appeal to the Supreme Court of Appeal, which was dismissed. 
        The matter is considered settled.

        Phutuma Networks (Pty) Ltd (Phutuma)
        In August 2009, Phutuma served a summons on Telkom, claiming for damages, in the amount of R5.5 billion, 
        arising from a tender published by Telkom in November 2007. The High Court granted absolution from the 
        instance, in Telkom's favour. The Supreme Court of Appeal (SCA) had initially dismissed Phutuma's 
        application for leave to appeal in October 2014. On 4 November 2014, the SCA rescinded its order 
        granted in October 2014. In early 2015, the SCA referred the application for leave to appeal back 
        to the full bench of the North Gauteng High Court. The leave to appeal was heard in September 2016 
        and was upheld. The matter now needs to be re-enrolled for trial.

        CONTINGENT ASSETS
        TAX MATTERS
        As noted in the prior year consolidated annual financial statements, the tax treatment of the loss that 
        arose in prior years on the sale of foreign subsidiaries is based on a specific set of circumstances and 
        a complex legislative environment. On 4 August 2016, SARS issued a tax assessment relating to the 2012 
        period. After consultation with external specialist tax and legal advisors, the group disagreed with 
        SARS' audit findings, however the tax refund received, relating to the 2012 sale, remains contingent 
        and will only be recognised once the matter has been resolved with SARS. The matter is continually 
        being assessed to ensure that developments are appropriately reflected in the financial statements. 
        Refer to note 17. The matter has been heard in the tax court and Telkom is awaiting judgement on 
        the matter.

                                                                  Reviewed          Restated                    
                                                                Six months        Six months       Restated    
                                                                     ended             ended       Year end   
                                                              30 September      30 September       31 March   
                                                                      2018              2017           2018   
                                                                        Rm                Rm             Rm    
21.     Related parties
        Details of material transactions and               
        balances with related parties not disclosed        
        separately in the condensed consolidated interim              
        financial statements were as follows:              
        With shareholders:                                                                                     
        Government of South Africa*                                                                            
        Related party balances                                                                                 
        Finance lease receivable                                       234               311            229    
        Trade receivables                                              989               842          1 784    
        Provision for doubtful debt                                   (199)             (109)          (223)   
        Related party transactions                                                                             
        Revenue                                                     (2 048)           (2 760)        (4 176)   
        Individually significant revenue**                            (667)             (600)        (1 179)    
          South African Police Services                               (290)             (276)          (529)   
          SITA (Pty) Ltd                                              (106)             (113)          (218)   
          Department Of Justice                                        (42)              (56)           (93)   
          Department of Correctional Services                          (47)              (44)           (96)   
          Province of KZN Health Service                               (41)              (40)           (78)   
          Department of Defence***                                     (33)              (34)           (66)   
          KZN: Ethekwini Municipality                                  (23)                -            (40)   
          Department of Home Affairs***                                (20)               (4)            (2)   
          City of Johannesburg Metropolitan Municipality***            (37)               (6)            (4)   
          Eastern Cape Department of Health                            (28)              (27)           (53)   
        Collectively significant revenue**                          (1 381)           (2 160)        (2 997)   
          * In the current financial period, a related party was identified that was not included in the prior year
            disclosure. Comparatives have been restated to include this related party.
         ** The nature of the individually and collectively significant revenue consists mostly of data revenue. 
            Comparatives are restated due to the change in the top ten entities.
        *** Individually significant from the current period.

        At 30 September 2018, the Government of South Africa held 40.5% (30 September 2017: 39.3%) of Telkom's 
        shares, and had the ability to exercise significant influence, and the Public Investment Corporation 
        held 12% (30 September 2017: 11.9%) of Telkom's shares.

                                                                  Reviewed          Restated                    
                                                                Six months        Six months       Restated    
                                                                     ended             ended       Year end     
                                                              30 September      30 September       31 March    
                                                                      2018              2017           2018    
                                                                        Rm                Rm             Rm    
21.     Related parties (continued)
        With entities under common control:                                                                    
        Major public entities*                                                                                  
        Related party balances                                                                                
        Trade receivables                                               64                32             56    
        Provision for doubtful debt                                     (4)               (3)           (11)   
        Trade payables                                                  (1)               (1)            (2)   
        Related party transactions                                                                             
        Revenue                                                       (228)             (289)          (566)   
        Total expenses                                                 107               110            224    
        Individually significant expenses                              105               107            218    
          South African Post Office                                     23                23             43    
          Eskom                                                         82                84            175    

        Rent received                                                  (13)              (13)           (26)   
          Individually significant rent received      
          South African Post Office                                    (10)              (10)           (20)   
          Collectively significant rent received                        (3)               (3)            (6)   
        Rent paid                                                       13                11             23    
          Individually significant rent paid:         
          South African Post Office                                      8                 8             17    
          Collectively significant rent paid                             5                 3              6    
        Key management personnel compensation:                                                                 
        (Including directors and prescribed         
        officers' emoluments)                                                    
        Related party transactions                                                                             
        Short-term employee benefits                                    81               104            247    
        Post-employment benefits                                         6                 8             15    
        Termination benefits                                             3                13             25    
        Equity compensation benefits                                    20                15             (3)   
        * Comparative balances have been restated to include the related party balances, revenue and expenses 
          of the group subsidiaries.

        Terms and conditions of transactions with related parties
        Except as indicated above, outstanding balances at 30 September 2018 are unsecured and settlement occurs 
        in cash. There have been no guarantees provided or received for any related party receivables or payables. 
        Except as indicated above, for the period ended 30 September 2018, the group has not impaired any of the 
        amounts owed by the related parties. This assessment is undertaken each financial period through examining 
        the financial position of the related party and the market in which the related party operates.
        
                                                                                 Reviewed          Reviewed    
                                                                               Six months        Six months   
                                                                                    ended             ended    
                                                                             30 September      30 September   
                                                                                     2018              2017   
                                                                                       Rm                Rm   
22.     Reconciliation of profit for the period to cash             
        generated from operations                                    
        Cash generated from operations                                              4 051             3 873     
                                                                                                                
        Profit for the period                                                       1 419             1 628     
        Finance charges and fair value movements                                      443               352     
        Taxation                                                                      494               594     
        Investment income and income from associates                                 (120)              (64)    
        Interest received from trade receivables                                      (71)              (61)    
        Non-cash items                                                              2 752             2 332     
        Depreciation, amortisation, impairment and write-offs                       2 802             2 660     
        Decrease in provisions                                                       (155)             (326)    
        Sale of property, plant and equipment                                         (20)              (18)    
        Foreign exchange movements                                                    (40)                -     
        Share based payment expenses                                                   74                49     
        Deferred revenue                                                               91               (33)    
        Movement in working capital                                                  (866)             (908)    
        Inventories                                                                   (74)             (280)    
        Accounts receivable                                                          (763)               40     
        Accounts payable                                                              (29)             (668)    

                                                                                 Reviewed          Reviewed      
                                                                               Six months        Six months     
                                                                                    ended             ended      
                                                                             30 September      30 September     
                                                                                     2018              2017     
                                                                                       Rm                Rm     
23.     Net debt reconciliation                                                                                 
        Total interest-bearing debt at reporting date                              10 143             8 809     
        Total interest-bearing debt at the beginning of the period                  9 412             6 285     
        Loans raised                                                                1 500             4 930     
        Loans repaid                                                                 (850)           (2 494)    
        Finance leases repaid                                                         (14)               (3)    
        Foreign exchange revaluation on loans                                          14                12     
        Other interest accruals                                                         -                 8     
        Finance charges capitalised to interest-bearing debt                           81                71     

        Interest accruals include the effect of interest amortised and accrued for in the closing balance of 
        interest-bearing debt.                                                    

        The group classifies interest paid as cash flow from operating activities.


                                                                                 Reviewed          Reviewed      
                                                                               Six months        Six months     
                                                                                    ended             ended      
                                                                             30 September      30 September     
                                                                                     2018              2017     
                                                                                       Rm                Rm     
24.     Finance charges paid                                                         (346)             (264)    
        Finance charges and fair value movements per statement  
        of profit or loss and other comprehensive income                             (443)             (352)    
        Non-cash items                                                                 97                88     
        Movements in interest accruals and interest on          
        uncertain tax provisions                                                      175               112     
        Net discount amortised                                                         82                71     
        Foreign exchange revaluation on loans                                          14                12     
        Borrowing costs capitalised                                                   (32)             (101)    
        Hedging costs                                                                (157)              110     
        Fair value adjustment*                                                        (24)             (116)    
        Unrealised foreign exchange loss                                               39                 -     
        * The fair value adjustment includes a gain of R4 million (30 September 2017: Rnil) related to assets 
          designated as at fair value through profit or loss.                                                    

                                                                                 Reviewed          Reviewed  
                                                                               Six months        Six months  
                                                                                    ended             ended  
                                                                             30 September      30 September  
                                                                                     2018              2017    
                                                                                       Rm                Rm      
25.     Taxation paid                                                                (497)             (723)   
        Net tax payable at the beginning of the period                               (309)             (424)   
        Current taxation                                                             (427)             (622)   
        Interest accrued and uncertain tax provisions                                  (7)              (13)    
        Net tax payable at the end of the period                                      246               336     

                                                                                 Reviewed          Reviewed    
                                                                               Six months        Six months   
                                                                                    ended             ended    
                                                                             30 September      30 September   
                                                                                     2018              2017   
                                                                                       Rm                Rm   
26.     Dividend paid                                                              (1 240)           (1 494)  
        Dividend payable at the beginning of the period                               (58)              (25)  
        Declared during the period - Dividend on ordinary shares                   (1 210)           (1 526)  
        Dividends declared to non-controlling interests                               (32)              (70)  
        Dividend payable at the end of the period                                      60               127   

27.     Significant events and transactions
        Results of the Telkom Annual General Meeting regarding directors re-appointments
        On 23 August 2018, all Board members were elected as per the Annual General Meeting ordinary resolutions.

        Dividends
        The Telkom Board declared an ordinary dividend of 237 cents per share on 28 May 2018 which was paid on 
        25 June 2018 to shareholders registered on 22 June 2018.    

        Employee Share Plan
        In May and June 2018, Telkom purchased 2,201,629 shares from the market through Rossal, a wholly owned 
        subsidiary, for the purposes of the employee share plan.    

        Allocation of shares in terms of the Telkom Employee Share Plan
        On 25 May 2018, the Board approved the sixth allocation of shares to employees in terms of its Employee 
        Share Plan.

        The number of shares to vest will depend on the extent to which the performance conditions are met at the 
        end of the applicable vesting period.

        Vesting of shares
        In terms of the Telkom Share Plan 101 191 and 31 500 shares vested to Sipho Maseko and Deon Fredericks, 
        respectively in June 2018.

        Appointment of new group chief financial officer and executive director
        Telkom announced on 27 June 2018 that Deon Fredericks would step down as group chief financial officer 
        and executive director with effect 30 June 2018. Tsholofelo Molefe has been appointed as the new group 
        chief financial officer and as an executive director of the Telkom Board with effect from 1 July 2018.

        Retirement of non-executive director
        Telkom announced on 24 July 2018 that Mr Itumeleng Kgaboesele, an independent non-executive director, 
        would be retiring from the Telkom Board with effect from 23 August 2018. 

        Appointment of new external auditors
        On 23 August 2018, the AGM ratified the appointment of PricewaterhouseCoopers Inc. and 
        SizweNtsalubaGobodo Grant Thornton Inc. for appointment as the joint external auditors for the group 
        for the financial year ending 31 March 2019.

28.     Events after the reporting date
        Dividends
        The Telkom Board declared an ordinary dividend of 112.14 cents per share on 13 November 2018, payable 
        on 3 December 2018 to shareholders registered at the close of business on 30 November 2018.
        
        BCX Section 189 Process
        On 7 November 2018, BCX issued a company-wide communication advising its employees that it had served 
        unions with a notice in terms of section 189 of the Labour Relations Act. The notice invites the unions 
        to attend the first CCMA facilitated consultation session meeting.

        Conclusion of Telkom and Vodacom roaming and facilities leasing agreement
        On 7 November 2018, Telkom and Vodacom concluded a new roaming and facilities agreement. The roaming 
        agreement covers 2G, 3G and LTE roaming with seamless handovers between Telkom and Vodacom networks. 
        The facilities leasing agreement will allow Telkom to use Vodacom towers, antennas and shelters to 
        build out its own network. Telkom currently has a roaming agreement with MTN which expires in June 2019. 
        The company will conduct a phased transition from the current roaming agreement, which will be concluded 
        by the end of the contract period.

        Other matters
        The directors are not aware of any other matter or circumstance since the financial period ended 
        30 September 2018 and the date of this report, or otherwise dealt with in the financial statements, 
        which significantly affects the financial position of the group and the results of its operations.
        
        
Centurion
13 November 2018

Group company secretary
Ephy Motlhamme
Tel: +27 12 311 3911
secretariat@telkom.co.za

Transfer secretaries
Computershare Investor Services (Pty) Ltd
Rosebank Towers
15 Biermann Avenue
Rosebank, 2196
PO Box 61051
Marshalltown, 2107

Sponsor
The Standard Bank of South Africa Ltd
Standard Bank Centre
30 Baker Street
Rosebank, 2196

Directors
JA Mabuza (chairman),
SN Maseko (group chief executive officer),
TBL Molefe (group chief financial officer),
SL Botha, GW Dempster, N Kapila,
K Kweyama, KW Mzondeki,
F Petersen-Cook, RG Tomlinson,
L von Zeuner, D Mokgatle,
S Moloko, S Luthuli

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