The Towering Deal: Swiftnet’s Towering Heights
In a move that could change the game for South Africa’s telecommunications industry, the Competition Commission has approved a whopping R6.75 billion deal between TowerCo and Telkom to acquire Swiftnet, the latter’s tower and mast business.
Swiftnet, the prized jewel of Telkom’s portfolio, boasts an impressive 6,200 installations across the country, providing co-location space to major mobile network operators. But why would Telkom want to unload its golden goose? The answer lies in shareholder value and a focus on core business operations.
The deal, pending approval from the Competition Tribunal, will see TowerCo, a newly formed company controlled by Actis Ohio Fund and Royal Bafokeng Infrastructure Investments, take the reins of Swiftnet. But what does this mean for competition in the market?
Competition Concerns Allayed
According to the CompCom, the proposed transaction is unlikely to substantially lessen or prevent competition in any market. TowerCo, the primary acquiring firm, was established specifically for this purpose, ensuring a level playing field.
Actis Group, a global investor, brings its expertise in energy infrastructure, real estate, and private equity to the table. Meanwhile, Royal Bafokeng Group, an investment holding company, contributes its diversified portfolio of interests across various sectors and geographies.
Public Interest Commitments
To address public interest concerns, the merger parties have committed to procuring services from small/medium enterprises and firms owned by historically disadvantaged persons for a period of five years from the merger implementation date. This move aims to promote socioeconomic development and empower marginalized communities.
The proposed deal is a significant milestone in South Africa’s telecommunications landscape, with far-reaching implications for the industry. Will it shake things up or maintain the status quo? Only time will tell.