Vodacom Group will spin off its South African telecommunications tower portfolio into a separate business and may seek partners for the newly created entity.
CEO Shameel Joosub told TechCentral in an interview on Monday that the plan is to spin off the “towerco” (it doesn’t have a formal name for the new entity yet) by the group’s financial year-end in March. The group has begun recruiting for a CEO to lead the business, Joosub said.
Rival MTN Group recently decided to spin off a portion of its South African tower portfolio, although, unlike Vodacom, it intends selling the asset. An announcement on a buyer for MTN’s South African tower portfolio is believed to be imminent.
Vodacom won’t sell its tower portfolio, Joosub said, because the group views it as a strategic asset. But he said it is keen to finding partners for the business — possibly other mobile network operators or “other tower entities”.
Spinning off Vodacom’s tower portfolio into a separate business will give it focus through having its own management team and this will also “ensure it is being run properly”, said Joosub. But it will also give Vodacom “optionality”, he said.
“Can we combine the towers with someone else? Can we reduce the cost of operating? Can we have common security? Can we have common maintenance? Those types of things (are worth considering). That’s the starting point… If we get proper towerco people in to run it, that focus will bring opportunities – increased tenancies, all those kinds of things,” he said.
Telkom announced in September that it would seek a JSE listing for its masts and towers business, known as Swiftnet. Telkom has 6,225 towers across South Africa.
“The current Telkom valuation is not a true reflection of its intrinsic value. The value of the Swiftnet business is currently not being recognised,” Telkom CEO Sipho Maseko said at the time.
“A separate listing of Swiftnet will affirm the valuation of the masts and towers business and its contribution to the overall valuation of the Telkom business, thereby unlocking further value for Telkom,” he said.