End of an era for Telkom

Telkom’s sale of its Swiftnet business gave the telecoms giant a R6.58 billion boost for its 2025 financial year.

Telkom released a trading statement on Friday, 28 March 2025, outlining its earnings expectations for the year ended 31 March 2025.

The telecoms giant expects its headline earnings per share to increase by 10.0% to 413.6 cents per share.

It also projects that its basic earnings per share will grow by as much as 300% to 1,542.0 cents per share.

This significant jump is largely due to the sale of its masts and towers business, Swiftnet, to a consortium of investors.

“Telkom is pleased to advise that parties successfully closed out the sale of Swiftnet on 27 March 2025,” the company said.

It added that the provisional consideration received in cash amounted to R6.58 billion.

“The increase in reported earnings is mainly due to the profit made on the sale of Swiftnet, a non-recurring item impacting the current year results,” Telkom said. 

This deal has been in the works for a year, with Telkom having announced its intention to sell Swiftnet in March 2024.

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.

This includes the iconic “Telkom Joburg Tower”, also known as the Hillbrow Tower, in Johannesburg, which was the tallest tower in Africa for 50 years until it was surpassed in 2021 by the Iconic Tower in Egypt.

This tower features in Joburg City’s official logo and became a tourist attraction in the city.

In a Telkom conference call on 22 March 2024, Telkom CEO Serame Taukobong explained that Swiftnet has a total tower ecosystem of just under 4,000.

This represents the total number of towers, including all structures like poles and masts, that were part of Swiftnet’s portfolio.

However, only 2,900 of these structures are considered commercially active towers. These are the towers that are currently generating revenue by having tenants renting space on them.

Therefore, Taukobong explained that certain strategic towers would not be sold outright. This includes the Hillbrow Tower.

He explained that Telkom is retaining ownership of the physical property of these strategic towers. However, Swiftnet’s buyers will have full access to rent space and operate commercially on them.

Telkom explained that the disposal of Swiftnet is in line with its stated value-unlock strategy, which includes considering non-core assets for disposal.

The company said the proceeds from this sale will be used to primarily pay down its debt, thereby strengthening its balance sheet and enabling it to release free cash flow for investment in Telkom’s core businesses.

South Africa’s Competition Commission announced its approval of the sale in August 2024, and the Independent Communications Authority of South Africa gave the green light in December.

Telkom confirmed that the sale closed on 27 March 2025, and Swiftnet is now officially owned by a consortium of investors. 

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

Telkom’s annual results announcement for its 2025 financial year is expected to be released on or about 10 June 2025.