Telkom, South Africa’s leading landline operator, said on Monday group revenue for the nine months ending December 31 climbed 0.9%, driven by a 40.7% rise in mobile service revenue.

The news sent shares up 7.6% to R39.74 rand at the open.

Group revenue rose to R32.4 billion ($2.18 billion) from R32.1 billion in the same period a year earlier, said the partly state-owned company, which is also the country’s third biggest mobile service provider said in a statement.

Group revenue growth compares with a fall of 0.4% reported in the first half to September 30 thanks to a slight recovery in the economy in the third quarter as the country lifted the majority of lockdown restrictions, Group Chief Executive Sipho Maseko said.

The consumer business, which houses Telkom’s mobile business, continues to be the driver of growth due to increased demand for connectivity from millions of South Africans working and studying from home due to Covid-19 lockdowns.

This saw mobile data revenue, which contributes over 70% of mobile service revenue, growing by 46.2%, driven by strong growth in mobile traffic of 64.4% and a 27% growth in mobile broadband customers to more than 10 million.

Overall mobile service revenue grew to R12.6 billion from R8.9 billion in the prior period.

Telkom is branching out of its declining fixed-line telephone business with heavy investment in its mobile phone unit, taking on leading operators Vodacom and MTN .

Capital expenditure of R5.1 billion was invested in the period in growth areas such as the mobile business and fibre.

Its fixed line business, Openserve, remained under pressure as fixed voice usage continued to decline, despite an increase in demand for fixed connectivity, Telkom said.

Group earnings before interest, tax, depreciation and amortisation were up 8.5% year on year, underpinned by ongoing cost management.

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