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VENTURES AFRICA – South African telecommunication provider Telkom has dismissed speculations that it is in talks to sell its mobile towers to a Southeast Asian investor, saying it has not received any proposal.
“Telkom would like to correct statements that have been widely published regarding the sale of its tower infrastructure. The Company has not received any proposal from a South East Asian company for the sale of its mobile towers business or an investment of $3 billion,” the company said in a statement released to technology news website, BusinessTech.
Business Day reported yesterday that the telecom company is in talks to sell 1,600 mobile towers to a firm from Southeast Asia as it looks to focus on its core business.
Telkom has been struggling to grow its mobile market share in the competitive South African market, with major players MTN and Vodacom controlling a combined share of 84 percent while Cell C holds a 14 percent share, a report by Deloitte Digital revealed.
Telkom controls only 2.2 percent with 1.56 million customers.
The telecom company is therefore keen to refocus human and capital assets by selling its towers – which are costly to maintain – and concentrate on its core business by providing attractive services to consumers.
This would be in line with similar strategies employed by other operators such as MTN and Cell C, which have both sold mobile towers in parts of the continent, while UAE-owned Etisalat has employed Standard Bank to oversee its towers sale.
Managing towers in Africa is considered very expensive given the challenges attached with running them. Issues such as poor electricity, lack of infrastructure and insecurity challenges raises the cost of telecom firms.
It is therefore understandable that they would relinquish control to focus rather on their core business, given the competitive nature of the business.