New York-listed IHS Holding Ltd, is considering a bid for South Africa’s Telkom SOC’s towers and masts business Swiftnet, according to Bloomberg. Although the structure of the potential deal is still under discussion, Telkom remains open to offers from other companies, and there is no guarantee IHS will buy the unit.
According to the post, this unit, Swiftnet, is worth approximately 8.7 billion rands ($472 million) based on future expected cash flows. The Telkom SA tower infrastructure pursued a separate listing on the Johannesburg Stock Exchange in September 2021. (JSE). This plan, however, did not materialize.
Telkom CEO Serame Taukobong, who was speaking to TechCentral in June last year, said, “The [Telkom] board has said we should look at all the viable options – to rather be a strong minority, but in a bigger pool, if that gives you long-term value of the unlock.”
Taukobong explained that when Telkom was mulling the listing of Swiftnet last year, it was part of a plan to unlock cash, especially in light of the group’s expectations that it would spend R4.1-billion securing frequencies in the recent spectrum auction.
IHS Holding and Telkom have not commented on the matter, but Telkom shares have risen higher in the last few days since the speculation of IHS’s interest hit the news wave.
Read Also: IHS towers buy MTN SA’s asset for $412m, now 3rd world’s largest operator
About IHS Holding
Founded in 2001 by Lebanese-Nigerian, Issam Darwish alongside William Saad, IHS Holdings provides telecom tower infrastructure for mobile phone operators and is one of Africa’s largest telecommunications tower infrastructure providers. In 2021, IHS Towers was listed on the New York Stock Exchange.
IHS Holdings is the third-largest mobile infrastructure provider in the world. The company leases tower spaces to mobile operators under a 10-15 year contract. It owns over 715 towers in Nigeria and 23,000 towers across Africa.
In December 2019, the company announced its acquisition of Cell Site Solutions (CSS), an infrastructure solutions provider in Brazil. It was part of its growth plan to expand toward countries in the Middle East, Asia, and South America.
In June 2022, IHS Towers completed a $412 million purchase of MTN Group’s assets, helping them achieve one of their goals in delivering power management services to MTN South Africa’s 13,000 locations. It has been acquiring assets in South Africa as the country prepares for a scaled roll-out of a fifth-generation mobile network.
Other tower companies expanding across Africa
Over the past years, the telecom tower industry has experienced an unprecedented evolution. One of the critical reasons encouraging the deployment and improvement of the telecom infrastructure in Africa is the growing emphasis on enhancing internet connectivity.
The adoption of internet connections in the area has increased due to smartphone penetration, increased knowledge, growing digital technology penetration, and expenditures from numerous organizations and governments.
IHS Holding is not the first tower company expanding into Africa, and it is not its first time acquiring assets on the continent. Others have been expanding in Africa, including American Tower Corp. and Helios Towers.
These tower companies’ main objective is to take advantage of the growing demand for broadband as smartphones become more common and address the lack of telecom network services in rural regions.
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