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Telkom’s Openserve is next up for a JSE listing

A listing of Telkom’s data centre assets is also a possibility.
Image: Waldo Swiegers/Bloomberg

Telkom’s sprawling wholesale division, Openserve, is likely to be the next unit of the telecommunications group to be listed on the JSE.

That’s according to Telkom group CEO Sipho Maseko, who was speaking to TechCentral in an interview on Tuesday following the announcement that the group plans to list its masts and towers business, Swiftnet, on the Johannesburg bourse soon to unlock shareholder value.

News of the planned listing of Swiftnet sent Telkom shares soaring on Tuesday, rising more than 15%.

Once the Swiftnet listing is concluded, it’s very likely, Maseko said, that Openserve will follow with a JSE listing of its own, also designed to unlock trapped value.

He said there is considerable future value in Openserve, especially since it has invested considerably in fibre infrastructure in recent years, including fibre to the home and fibre to the business.

A listing of Telkom’s data centre assets is also a possibility, though a decision about how to unlock value in that business still hasn’t been taken and whatever is done will only happen after the Openserve unlock.

Significant

On Swiftnet, Maseko said Telkom opted for a listing over a strategic equity partner as it believes there is significant growth still to be had in towers and masts.

The plan is to create a free float of about 20% of Swiftnet at listing, but to expand the size of this over time. “In the fullness of time, we will probably be sub-50%,” Maseko said. “But there is still a lot of value that the Swiftnet team can add to this business.”

Government, which owns about 40% of Telkom, has given its full blessing to management’s value-unlock plan.

“Government has been very supportive of the overall strategy. We spoke about the value unlock and they understand the commercial logic of it,” he said. “They see the potential: Swiftnet will be liberated from Telkom and will drive the growth and expansion of towers on a carrier-neutral platform.”

Swiftnet’s clients include South Africa’s broadcasters and other mobile network operators.

“There is still a long runway (for Swiftnet). We have done reasonably well to decouple our masts and towers business, to position it an independent and agnostic towerco that can serve the interests of everyone,” said Maseko.

© 2021 NewsCentral Media

Duncan McLeod is Editor of TechCentral, on which this article was first published here.

 

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If ARC’s valuation of Rain is anything to go by (less said the better) then Telkom is massively undervalued.

It’s mobile business is bigger than Rain which ARC values at close to Telkom cap…. . It’s fiber and Openserve businesses are enormous and seems to be better managed nowadays. Then the towers business and then not sure how one values the copper business if it is even viable.

Hopefully the government shareholder overhang is reduced in the unlocking process?

Data is so expensive in Africa ,you sleep with your data on 1.7 GB you wake up in the morning with 100MB. It’s like your dreams were online.

End of comments.

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