Telkom SA Achieves Credit Rating Upgrade, Outlook Remains Positive

Telkom SA SOC Ltd.  has received a credit rating upgrade from S&P Global Ratings, which raised the company’s long-term foreign and local currency issuer credit ratings one notch to ‘BB+’ from ‘BB’ on November 24, 2025. The outlook on the ratings remains Positive.

The upgrade was primarily influenced by the recent sovereign credit rating upgrade of South Africa on November 14, 2025, highlighting the close link between Telkom, a Government Related Entity (GRE), and the South African government’s fiscal profile.

Key Drivers of the Upgrade

As a GRE, Telkom’s credit rating is closely tied to the sovereign rating. The S&P upgrade followed its decision to raise South Africa’s long-term local currency rating to ‘BB+’ and foreign currency rating to ‘BB’, reflecting potential improvements in fiscal metrics and government debt stabilization.

Telkom’s strong financial position also played a critical role, allowing the company to be rated a notch above the sovereign’s foreign currency rating. S&P affirmed Telkom’s Stand-Alone Credit Profile (SACP) at ‘bbb-’, after the company successfully passed the rating agency’s liquidity stress test.

The company’s deleveraging efforts and robust credit metrics further supported the upgrade. Following the disposal of its masts and towers subsidiary, Swiftnet, in March 2025, the proceeds were largely used for debt reduction, lowering S&P-adjusted debt to EBITDA from 2.0x in fiscal 2024 to 0.9x in fiscal 2025.

Operational performance improvements also contributed, with Telkom maintaining conservative credit metrics and an improving margin profile driven by its data-led strategy and ongoing cost optimization initiatives. S&P projects adjusted debt to EBITDA to remain low at around 0.8x–1.0x for the coming fiscal years.

The continued Positive outlook reflects Telkom’s commitment to prudent balance sheet management and long-term value creation for stakeholders as it executes its strategic initiatives.