Telkom’s Swiftnet sale approved

Telkom has received approval from the Independent Communications Authority of South Africa (ICASA) to sell its masts and towers business, Swiftnet, to a consortium of investors. 

The consortium includes an infrastructure fund managed by private equity firm Actis and an infrastructure investment vehicle owned by Royal Bafokeng Holdings. 

This was revealed in a SENS announcement on 17 December from Telkom, saying that the majority of conditions for the transaction to be completed have been finalised. 

Specifically, Telkom now has approval from shareholders, which was given at its Annual General Meeting in May, and from ICASA. The approval from the telecommunications regulator was obtained on 13 December 2024. 

It has also received approval from the Competition Commission.

Swiftnet is expected to be sold for an estimated R6.75 billion to Actis and Royal Bafokeng.

The Actis Group is a global investor with investments in energy infrastructure, long life infrastructure, digital infrastructure, real estate and private equity.

In South Africa, Actis Group is invested in the food retail, education, fibre and internet services sectors.

The Royal Bafokeng Group is primarily an investment holding company with minority interests held in various investments across diverse sectors and geographies.

These include infrastructure, property, financial services, telecoms, pharmaceuticals, resources and industrial sectors.

The company’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 tower infrastructure in the South African market. It owns approximately 3,900 commercially viable masts and towers in South Africa. 

Telkom said the sale is in line with its stated value-unlock strategy under CEO Serame Taukobong. 

This strategy has evolved over the past few years, with Taukobong saying it would be accelerated in 2023 and 2024. 

Telkom initially planned to list Swiftnet separately on the JSE by the end of 2022. However, this was delayed because of unfavourable market conditions, forcing the company to change its plans. 

Taukobong said in 2023 that part of the cash generated by the sale of Swiftnet would be used to strengthen its balance sheet. “It will be a big contributor to our negative free cash flow,” he said in July 2023.

“The cash income from the sale of the towers will help us to recalibrate our balance sheet and put more investment in capex for our fibre business.”