Telkom mulls towers sale after pausing Swiftnet listing

Telkom is considering all “viable” options for its towers and masts business, Swiftnet, including the sale of a majority stake in the company to an independent tower operator.

That’s according to Telkom CEO Serame Taukobong, who was speaking to TechCentral following the publication of the telecommunications group’s 2022 annual results on Tuesday.

Telkom put its plan to list Swiftnet on the JSE – initiated by Taukobong’s predecessor, Sipho Maseko – on ice earlier this year given the deterioration in market conditions caused by Russia’s war against Ukraine. Now a sale is among measures being mooted.

Taukobong explained that when Telkom was mulling the listing of Swiftnet last year, 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 recent 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, he said.

Telkom is now considering whether it really needs to retain control of Swiftnet, or whether a sale of a majority stake in the company to a third-party tower operator makes more sense.

“The [Telkom] board has said we should look at all the viable options – to rather be a strong minority, but in a bigger pool, if that gives you long-term value of the unlock.”

Taukobong said tower operators are interested in Telkom’s portfolio, but that they typically require control of the entity they are buying.

MTN and IHS

MTN Group recently concluded the sale of a large part of its South African tower portfolio to IHS Towers, one of the largest independent tower owners and operators.

In terms of its agreement with MTN, IHS will also provide power management services to 13 000 sites, including those in the acquisition portfolio, across South Africa.

IHS Towers will own 70% of the South African towers business with the remaining 30% to be owned by a broad-based black economic empowerment consortium.  – © 2022 NewsCentral Media