Johannesburg, 24 May 2024 — Telkom, one of South Africa's leading telecommunications companies, has secured shareholder approval to sell its masts and towers business for an estimated R6.75 billion. The decision was unanimously endorsed at the company’s general meeting held today.
In March, Telkom announced its agreement to divest its masts and towers business, operated under Swiftnet, for a base purchase price of R6.75 billion. Swiftnet, a major player in South Africa's masts and towers market, generates revenue by leasing its infrastructure to mobile network operators, enabling them to deliver connectivity to their subscribers.
Swiftnet boasts ownership of approximately 3,900 commercially viable masts and towers across the country. The sale aligns with Telkom’s strategy to unlock value by divesting non-core assets.
The transaction involves a consortium of investors, including an infrastructure fund managed by a subsidiary of Actis LLP and a vehicle owned by Royal Bafokeng Holdings, which serves as the Black Economic Empowerment (BEE) partner.
In a statement released through the Stock Exchange News Service (SENS) today, Telkom confirmed the sale agreement. The disposal is classified as a Category 1 transaction per the Johannesburg Stock Exchange (JSE) listing requirements, as it surpasses 30% of Telkom’s market capitalization.
Telkom's latest financial results revealed a modest increase in group revenue, which rose to R11.30 billion in the last quarter of 2023. This growth was driven by enhanced data connectivity services in both mobile and fixed networks. The company noted significant contributions from prepaid mobile subscriber recharges and the continued expansion of Openserve’s fibre networks.
Swiftnet's effective commercialization of its mast and tower assets also played a crucial role in boosting revenue. Additionally, BCX, Telkom's ICT subsidiary, reported double-digit growth in hardware and software demand.
Despite these gains, traditional voice and data revenues continued to decline as customers migrated to next-generation (NGN) products. However, the uptake of NGN services by retail and enterprise customers contributed to a 5.1% growth in NGN revenue, which helped offset the decline in traditional revenues.
The company reported a net growth in group revenue of R221 million for the quarter, with NGN revenues increasing by R440 million while traditional revenues dropped by R219 million.
Telkom's mobile subscriber base expanded by 6.4% to 19.7 million, with a 19.7% surge in mobile data traffic to 370 petabytes, underscoring the growing demand for data services.
The sale of Swiftnet marks a significant milestone in Telkom's strategic realignment, aiming to enhance shareholder value and streamline operations by focusing on core business areas.
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