Telkom, the third largest mobile operator in South Africa, has announced the sale of its tower business, Swiftnet, to Towerco Bidco Proprietary Limited for $343 million.
Swiftnet, which boasts a substantial mast and tower infrastructure with over 4000 installations and provides co-location space to major mobile network providers, has been sought after by Telkom for nearly three years as the company aims to maximize shareholder value.
The decision to divest Swiftnet was first disclosed in September 2021, with Telkom’s CEO, Sipho Maseko, expressing that the unit’s value was not accurately reflected in the company’s shares. Telkom has now confirmed an agreement with Towerco Bidco, a new entity primarily owned by Actis, with 70% ownership, and Royal Bafokeng Holdings holding the remaining 30%.
Telkom emphasized that the sale signifies its commitment to strengthening its financial position, reducing debt, and enhancing liquidity. Serame Taukobong, Telkom Group CEO, stated that this move aligns with the company’s strategy to focus on core business operations and concentrate on infrastructure assets while realizing the value in non-core holdings. He also highlighted the transaction’s positive impact on related businesses, particularly Telkom Consumer and Openserve, ensuring continued access to Swiftnet’s infrastructure.
David Cooke, managing partner at Actis, expressed confidence in the long-term value of the Swiftnet prospect and looks forward to continuing to work with Telkom to provide access services to Telkom Consumer and Openserve.
Although the purchase is still subject to shareholder and regulatory clearances, Telkom is optimistic about the potential benefits for all parties involved. The company believes this strategic move will create long-term value for Telkom and its shareholders, positioning it as a leader in South Africa’s evolving digital landscape.
