Telkom, South Africa’s third largest mobile network operator by subscriber base, will sell off its tower and mast assets housed under its subsidiary Swiftnet for R6.75 billion (~$356 million) to TowerBidco, a newly created entity owned by Royal Bafokeng Holdings and Actis LLP infrastructure fund.

Swiftnet operates over 4,000 towers in South Africa.

In a statement to shareholders, Telkom said that the sale aligns with the company’s strategy to sell off non-core assets to focus on unlocking the intrinsic value of its more core operations. “Proceeds [will be] utilised to primarily pay down Telkom debt, thereby strengthening [its] balance sheet and enabling it to release free cash flow.” 

In November, Telkom announced a pivot into a more infrastructure-led business model. The model would be underpinned by investing capital into building and maintaining infrastructure assets including fibre networks, data centres, satellite, and marine cables. Swiftnet’s sale follows the company’s announcement in 2023 that it was considering selling a minority stake in its fibre infrastructure subsidiary, Openserve, which was unbundled in 2022.

According to the company, the strategy will enable the company to be “an enabler of South Africa’s digital future.” The strategy, which has been in place for a year, is expected to be completed by 2025.

According to the company, the high demand for infrastructure, a leading market position, significant barriers to entry in infrastructure, a strong balance sheet and a so-called experienced management team puts it in a favourable position to pursue the infraco model.

“[An] InfraCo strategy realises our true competitive advantage – showing Telkom to be a strategic national asset – the backbone of the SA’s digital economy and the enabler of the country’s digital future,” the company stated.