Updated Trading Statement Telkom SA SOC Limited (Registration number 1991/005476/30) JSE share code: TKG ISIN: ZAE000044897 ("Telkom" or the "Group") Updated trading statement Shareholders of Telkom are referred to the trading statement released on the Stock Exchange News Service of the JSE Limited on 10 October 2014 whereby Shareholders were advised that the results to be reported on for the six months ended 30 September 2014 would be at least 20% lower than those of the prior corresponding period. The results to be reported on include the following items that are not part of the results from normal business operations: - Provision for retrenchment and voluntary severance and retirement packages of approximately R234 million after tax in the current period; and - The net curtailment gain recognised on the post retirement medical aid liability of R2 173 million in the prior period. Reported and normalised earnings for the six months ended 30 September 2014 are expected to differ from the prior corresponding period as indicated below: 30 September 2013 30 September 2014 Reported Expectation Basic earnings per share Reported 566.2 55%-65% lower 311cps - 368cps lower Normalised 140.6 80%-90% higher 112cps - 127cps higher Headline earnings per share Reported 649.8 60%-70% lower 390cps - 455cps lower Normalised 224.2 10%-20% higher 22cps - 45cps higher The increase in normalised basic earnings for the six months ended 30 September 2014 are mainly as a result of: - Lower payments to mobile operators resulting from the reduction in termination rates; - lower asset impairments and write offs; and - a decrease in expenses relating to the post-retirement medical aid liability due to the curtailment and settlement of part of the liability in the prior period. This was partially offset by: - lower foreign exchange gains as a result of the implementation of hedge accounting from 1 October 2013, which results in certain foreign exchange gains and losses not being recognised in earnings in the current period.; and - higher taxation. The main reason for the higher increase in normalised basic earnings per share (80% - 90% higher) when compared to the increase in normalised headline earnings per share (10% - 20% higher) is the asset impairments and write offs in the prior period which are excluded from the calculation of headline earnings per share. Telkom will release its results for the six months ended 30 September 2014 on 17 November 2014. This updated trading statement has neither been reviewed nor reported on by the Group's external auditors. Pretoria 3 November 2014 Sponsor The Standard Bank of South Africa Limited Date: 03/11/2014 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.