Telkom Shareholders to Vote on Tower Sale

Telkom shareholders will soon decide on the proposed sale of the company’s towers and masts to a consortium led by private equity firm Actis. This move follows a similar strategy adopted by rivals MTN and Cell C, potentially leaving Vodacom as the only major South African mobile operator holding onto its tower infrastructure.

Key Details of the Deal:

  • Consortium: Led by Actis (70%) with Royal Bafokeng Holdings (30%) acquiring Telkom’s Swiftnet business, which houses the towers.
  • Value: The deal values Swiftnet at R6.75 billion.
  • Shareholder Vote: Shareholders will vote on the sale at a general meeting on May 24th, 2024.

Telkom’s Rationale:

Telkom CEO Serame Taukobong highlights the sale as a strategic move to:

  • Unlock shareholder value: By monetizing the tower assets.
  • Streamline operations: Focus resources on core Telkom businesses like Telkom Consumer and Openserve.
  • Improve financial health: Reduce debt and enhance liquidity.

Benefits for Telkom:

  • Continued access: Guaranteed access to Swiftnet infrastructure under mutually beneficial terms for Telkom’s core businesses.
  • Financial benefits: Proceeds from the sale will be used to reduce debt and improve Telkom’s financial position.

Looking Ahead:

  • Regulatory approval is still required for the sale to proceed.
  • If approved, Telkom will join MTN and Cell C in divesting tower infrastructure.

This potential sale signifies a shift in South Africa’s mobile network landscape, with Telkom following the trend of industry peers.

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