Trading statement Telkom SA SOC Limited Registration number 1991/005476/30) JSE share code: TKG ISIN: ZAE000044897 ("Telkom" or “the company”) Trading Statement In terms of paragraph 3.4(b) of the JSE Limited (“JSE”) Listing Requirements, companies are required to publish a trading statement as soon as they have reasonable certainty that the financial results for the next period to be reported upon will differ by at least 20% from those of the previous corresponding period. Telkom is currently finalising its annual results for the twelve months ended 31 March 2017, which will be released on the Stock Exchange News Service (“SENS”) of the JSE on 5 June 2017. The prior year’s reported earnings were impacted by voluntary severance packages (VSPs) and voluntarily early retirement packages (VERPs) of R2 193 million with a related tax benefit of R 517 million while the current year impact is significantly lower at R66 million with a related tax benefit of R13 million. As a result, the reported headline earnings per share (HEPS) is expected to increase between 110% and 130% when compared to the prior year. The reported basic earnings per share (BEPS) is expected to increase between 60% and 80%. Excluding the impact of VSPs and VERPs and the related tax benefit, HEPS is expected to increase between 0% and 20% and BEPS is expected to be between 10% lower and 10% higher than the prior year. 31 March 2016 31 March 2017 Reported earnings Expected growth Expected growth (cents) (%) (cents) Basic earnings per share 264 cps to 352 cps Reported 439.4 cents 60% – 80% higher higher Excluding VSP and VERP 767.2 cents 10% lower – 10% higher 77 cps lower to 76 cps higher Headline earnings per share Reported 330.0 cents 110% – 130% higher 363 cps to 429 cps higher Excluding VSP and VERP 657.9 cents 0% – 20% higher 0 cps – 131 cps higher The above earnings include the performance of BCX, which has been incorporated for twelve months compared to seven months in the prior year. The above information has not been reviewed nor reported on by Telkom’s independent external auditors. The Group's annual results for the twelve months ended 31 March 2017 will be released on SENS on 5 June 2017 with a presentation in Johannesburg on the same day. The presentation will be available for all stakeholders on the Group's website, www.telkom.co.za/ir . Centurion 11 May 2017 Sponsor The Standard Bank of South Africa Limited Date: 11/05/2017 04:55:00 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.