Sale of Telkom’s tower portfolio likely within weeks

Telkom is weeks away from announcing the sale of its masts and towers business.

Group CEO Serame Taukobong told TechCentral on Tuesday that Swiftnet, which houses the towers portfolio, will be sold in its entirety within the next few weeks.

Although a sale is imminent, Telkom would not be drawn on who it is selling the business to, though likely candidates include specialist tower operators such as IHS Holding, Helios Towers and American Tower Corporation.

Swiftnet owns more than 4 000 towers. Taukobong said at Telkom’s annual results presentation in Sandton that the business will be sold “at the right price”.

Swiftnet is a wholly owned subsidiary of Telkom that manages and commercialises the masts and towers portfolio. It saw marginal revenue growth of 0.9% to R1.3-billion, helped by the construction of new towers and other facilities. It did, however, lose two key customers in the period – it didn’t say who.

Telkom said Swiftnet’s overall financial performance was satisfactory, with improved underlying earnings performance and strong Ebitda margin of 68.8% (R896-million). Ebitda is a measure of a company’s operational performance and is often used as a metric by investors to value telecommunications operators.

Excluding the impact of once-off transaction advisory services during the year, Ebitda was R927-million, an increase from R909-million reported in the previous year. This reflected an improvement in underlying earnings performance at an Ebitda margin of 71%.

Read: Telkom scraps dividend until further notice

Telkom put its plan to list Swiftnet on the JSE – initiated by Taukobong’s predecessor, Sipho Maseko – on ice last year given the deterioration in market conditions caused by Russia’s war against Ukraine.

Taukobong said last year that when Telkom was mulling over listing Swiftnet, it was part of a plan to unlock cash, especially in light of the group’s expectations that it would spend R4.1-billion securing frequencies in the spectrum auction. In the end, Telkom paid R2.1-billion for spectrum, taking the anticipated pressure off the balance sheet and allowing it to revisit its strategic options for Swiftnet.  – © 2023 NewsCentral Media

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