Telkom shareholders approve Swiftnet disposal


Telkom shareholders approved the sale of its masts and towers business to a consortium for an estimated R6.75 billion.

The telecom giant announced today that its shareholders unanimously voted to approve the disposal at the company’s general meeting held on 24 May 2024.

Telkom announced today that it will sell its masts and towers business, housed in Swiftnet, for a base purchase price of R6.75 billion.

Swiftnet’s core business involves generating revenue from leasing space on its owned mast and tower-related infrastructure to customers, mainly mobile network operators.

This enables customers to deliver connectivity to their respective subscribers or customers and operate wireless networks.

Swiftnet is one of the largest owners, operators and developers of masts and towers infrastructure in the South African market. It owns approximately 3,900 commercially viable masts and towers in South Africa

In a SENS announcement released today, Telkom confirmed that it has entered into a sale agreement with a consortium of investors consisting of two parties.

These parties are –

  • An infrastructure fund managed by a subsidiary of Actis LLP
  • A vehicle owned by Royal Bafokeng Holdings as its BEE partner

Telkom said the disposal constitutes a Category 1 transaction in terms of the JSE’s listing requirements, as it exceeds 30% of the company’s market cap.

The telecoms giant said the disposal is in line with its stated value-unlock strategy, which includes considering non-core assets for disposal.

The purchase consideration for this disposal represents an enterprise value of R6.75 billion

In its latest results, Telkom reported relatively flat revenue growth for the last quarter of 2023.

Group revenue increased to R11.30 billion, driven by the company’s data-connectivity propositions for its mobile and fixed networks. 

The telecoms company said higher recharges by prepaid mobile subscribers and Openserve’s ongoing rollout of fibre networks to homes and enterprises drove revenue growth.

This was supported by Swiftnet’s commercialisation of the masts and towers portfolio. 

Enterprises’ demand for hardware and software remained healthy and grew in double digits at BCX.

However, overall revenues were impacted by the continued decline in traditional voice and data revenues as customers are migrating to next-generation (NGN) products.

“The continued uptake of our NGN products by retail and enterprise customers grew both active mobile and fixed subscribers,” the company said. 

“This, along with double-digit increases in data consumption, bode well for the Group NGN revenue.”

NGN revenue grew by 5.1%, offsetting traditional revenue declines. 

While NGN revenues advanced by R440 million, traditional revenues retracted R219 million, leading to group revenue growth of R221 million for the quarter.

Telkom’s mobile subscribers grew by 6.4% to 19.7 million, while mobile data traffic increased by 19.7% to 370 petabytes.