The third-largest telecom company in South Africa, Telkom, is in exclusive talks with a group of stock investors, including a Black Economic Empowerment partner, about selling its masts and towers business, Swiftnet.
Because Telkom wants more value from this section, it thinks the move is necessary because it is undervalued in the current group structure.
Telkom, which the government mainly owns, also reported a significant 46.7% rise in half-year profit simultaneously. The increase comes from lower depreciation costs and a substantial rise in core profit. Earnings per share increased from a revised profit of 1.33 rand to 1.95 rand in the six months ending September 30.
Telkom expects to complete its strategic move towards infrastructure by 2025. After the masts and towers transition, the company plans to pursue minority partnerships for Openserve and a strategic equity partner for BCX, its fibre, and ICT companies.
Additionally, Group revenue rose 2.5% to 21.8 billion rand ($1.19 billion). Mobile traffic, monetising fibre rollouts, and IT business expansion drove this increase. Telkom increased mobile external income by 4.1% to 11 billion rand.
The telecom’s investment in fibre and LTE customer migration helped it succeed. Cost-cutting partially offsets inflation, raising operational expenses by 2.4%. However, group EBITDA rose 1.7% to 5 billion rand.
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Understanding South African telecoms
Technological advances and fierce rivalry are changing South Africa’s communication market. Telkom, a significant participant, must adapt to changing consumer demands and regulatory frameworks.
In this climate, telecom decisions face challenges. Adapting to new technology involves balancing market competition and regulatory compliance. Government policies also significantly impact Telkom’s decisions.
Yet, these problems offer opportunities. The company’s masts and towers exploration matches the growing demand for telecom infrastructure. Telkom’s transformation into an infrastructure powerhouse equips it to capitalise on new possibilities and support national growth.
Affecting the evolution of connectivity
Customer experience is the focus of this technical transformation, not merely network upgrades. Telkom wants faster, more reliable connections by investing in cutting-edge tech. Customers may expect seamless services, decreased latency, and improved capabilities to satisfy a growing demand for high-speed data and richer content.
Strategically, Telkom leads innovation with this technology change. Beyond satisfying present consumer wants, it puts the company ahead of future demands.
The telecom’s use of fibre and LTE follows industry trends. Telkom’s ambitions align with the worldwide push for 5G technology and intelligent infrastructure, shaping South African telecom trends.