Telkom (TKG) – Many moving parts

Even though price leadership is usually not a sustainable strategy, Telkom continues to disrupt the mobile sector in SA. Albeit a challenger network, we believe that Telkom Mobile has a cost of production for data which is closer to that of the large incumbent mobile operators than it is to the other challenger MNO (Cell C).

While there are significant medium-term opportunities for BCX to cross sell enterprise telecoms and IT services into its existing base, we believe that the value unlock in Gyro is likely to be more gradual.