Standard Bank partners with Industrial and Commercial Bank of China Limited (“ICBC”) to provide R3.1 billion funding for Telkom’s network infrastructure

Telkom is known for providing integrated communications solutions to a range of customers across South Africa. The company is one of the major players in the South African telecommunications sector and recently reported an annual R346 million profit after tax in its financial results for the year ended 31 March 2023.

With this funding, Telkom will purchase network equipment from Huawei for increasing its network coverage and improving connectivity speed for its customers under its mobile business.

The funding consists of a long-term Down Payment facility from Standard Bank and a Sinosure covered facility, which enables tenor extension, of an extended long-term funding from Standard Bank and ICBC Shenzhen Branch. Standard Bank shares the Sinosure covered facility equally with ICBC Shenzhen Branch.

Sinosure is a major player in the Export Credit Agency market that traditionally provides insurance cover in currencies such as USD, EUR and CNY. In this cover Sinosure covers for ZAR, which is an innovative solution co-initiated amongst Standard Bank, ICBC and Sinosure. Standard Bank and ICBC closed the first cover in ZAR in 2020 and have closed the second ZAR cover in September 2023. This Sinosure ZAR cover is a sustainable solution for borrowers who sought local currency instead of foreign currency. Sinosure, with A+/A1/A+ credit ratings from the 3 major credit agencies, continues to support Telkom though its cover for Telkom for the purpose of tenor extension in the second round of funding. 

South Africa’s telecommunications sector is considered to be one of the most advanced on the continent, with high mobile penetration, growing internet penetration and significant growth in connectivity infrastructure in the past decade.

The increase in demand for connectivity has led to growing competition in the industry, with a rise in the number of telecoms startups, which will advance the sector.

Since it was founded in 1991, Telkom has maintained its role as a market leader. For the year ended 31 March 2023 Telkom saw an increase in mobile service revenue of R17.819 billion, up 1.8% from 2022,  and an increase in revenue from information technology of 13.7% to R6.371 billion.  As at June 2023, Telkom’s mobile data traffic and active mobile subscribers increased by 25.1% and 6.9% year on year to 329 petabytes and 18.5 million subscribers, respectively, while mobile broadband subscribers were up 8.9% to 11.7 million, comprising more than 63% of active mobile subscribers.

With this transaction, Standard Bank and ICBC Shenzhen Branch have partnered to support Telkom and Huawei, who are not only key players in the telecom sector but also key clients for both banks. We are proud to be able to support Telkom in its journey of continuing improvement of its network infrastructure.