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.
