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Telkom South Africa sells its tower business for $357M

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Telkom South Africa has sold its masts and towers subsidiary, Swiftnet, to a consortium of equity investors for 6.75 billion South African rands (US$357 million).

The Johannesburg Stock Exchange (JSE)-listed telecom operator made the announcement on Friday, March 22, saying that it sold Swiftnet to a newly created business called Towerco Bidco. Global private equity firm Actis holds a 70% stake in the new entity, with Royal Bafokeng Holdings owning the remaining 30%.

"This decision marks a pivotal moment in Telkom's journey towards unlocking shareholder value and streamlining our focus on core business operations," Telkom Group CEO Serame Taukobong said.

"This divestiture aligns perfectly with our strategy to concentrate on our infrastructure assets while realizing the inherent value in non-core holdings," he continued.

In February, the telecom operator announced that negotiations with a buyer for its Swiftnet masts and towers business had reached an advanced stage, and that it would be moving forward with the sale.

Telkom has said Swiftnet is one of the largest owners and operators of masts and towers infrastructure in South Africa, having approximately 4,000 installations and leasing co-location space to major mobile network operators.

Telkom Group CEO Serame Taukobong.   (Source: Telkom Group.)
Telkom Group CEO Serame Taukobong.
(Source: Telkom Group.)

Telkom SA announced the possible sale of its 4,000 towers in South Africa in November 2023, saying the sale aligned with its strategy to focus on its core connectivity infrastructure.

It said the preferred bidder is a consortium of equity investors – including a Black Economic Empowerment (BEE) partner – led and managed "by a reputable private equity firm."

Telkom SA joins others

With this sale, Telkom SA joins other operators MTN SA and Cell C in selling tower infrastructure to focus on core business operations, leaving only Vodacom among the major mobile operators still owning its towers.

"This move underscores Telkom's commitment to fortifying its financial position, reducing debt, and enhancing liquidity," the CEO said.

Furthermore, Taukobong said beyond the financial implications, the transaction ensures seamless continuity for Telkom's related businesses, particularly Telkom Consumer and Openserve, by guaranteeing continued access to Swiftnet's infrastructure under mutually beneficial terms.

"Actis sees long-term value in the Swiftnet opportunity and welcomes the continued association with Telkom as it continues to provide access services to Telkom Consumer and Openserve and as Actis continues to grow its digital infrastructure portfolio," Actis Managing Partner David Cooke said.


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Even though the transaction is subject to shareholder and regulatory approvals, Taukobong said Telkom remained optimistic about the potential benefits for all stakeholders.

"We believe this strategic move will create long-term value for Telkom and its shareholders, cementing our position as a leader in South Africa's evolving digital landscape," Taukobong concluded.

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*Top image source: Mario Caruso on Unsplash.

— Matshepo Sehloho, Associate Editor, Connecting Africa

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