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S&P Global decision affirms our turn-around strategy says Telkom

S&P Global decision affirms our turn-around strategy says Telkom

The decision by international ratings agency S&P Global to maintain Telkom's credit rating at BBB- is an affirmation of the telco's turn-around strategy.

This is according to Telkom Group CEO Sipho Maseko, who welcomed the decision and described it as a nod to the aggressive implementation of the strategy by the telco.

In a statement issued by Telkom, Maseko is quoted as saying, "We embarked on our turnaround strategy almost four years ago and in these trying times it is imperative that we maintain our focus. We will continue to actively manage our costs, our cash and our use of capital, in the most efficient manner possible."

S&P Global reportedly revised its outlook to negative and cited South Africa's downgrade and worsening economic situation for the amendment.

However, according to Telkom, it remains undeterred in its objectives despite the revision of its outlook to negative.

"The Group will be reviewing all its forward resource allocation to ensure effective prioritisation, along with the pursuit of a sustainable business," stated the telco.

Maseko added, "While we welcome the maintenance of our current rating we're also cognisant that we don't exist as an island. At this time, it is imperative that our national focus is shifted to shaping an effective way forward."

"The downgrade of the sovereign will potentially affect the economy at large and the country needs to pull together more than ever before. In the immediate term, the focus should be to avoid a recession. Collaboration between government, business, labour and civil society will be vital to evolve a new growth framework to take the country forward," he added.

In June 2016 Telkom announced an increase of 3.7% in its Group net revenue to R28 billion and a 15.5% increase in normalised headlines earnings for the year ended 31 March 2016 – results the company said signalled the conclusion of a successful three-year turn-around strategy.

The strategy was marked by a series of negotiations and engagements between Telkom SA and trade unions, most prominently Solidarity, as the telco's staff became central to the process.

In March 2017 the new-look end-to-end ICT solutions provider BCX was launched, as a result of the partnership between Telkom Business and Business Connexion.

Telkom will release its year-end result in June 2017.

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