Telkom 'in talks to sell its cellphone towers'

Telkom is considering selling its base stations to a company in Asia. Image: Wiki Images

A number of operators including MTN and Cell C have sold towers to third parties specialising in managing such infrastructure in order to cut costs but also focus more on customer service.

Selling off infrastructure would allow Telkom to focus on running its core business and providing more competitive products.

Telkom has said its mobile business continues to face the challenge of gaining market share in a tough trading environment.

Technology news website BusinessTech reported that an investment company from Asia aims to buy 1‚600 Telkom towers and build an additional 8‚400. This could see an investment of up to US$3bn made in South Africa.

"The investment would include setting up factories to build components that go into tower infrastructure‚" the website said.

Possibly share infrastructure

Further‚ there have been reports that Telkom is also in discussions with rival operator MTN on sharing infrastructure.

Telkom said it "continues to review its operations in an effort to stabilise the business and unlock its value". The company said it was engaging with various parties to consider the best options for the business.

Dobek Pater‚ a telecommunications analyst at Africa Analysis‚ said Telkom Mobile needed to become more competitive and begin putting more compelling offers into the market. "Spending a lot of money on building mobile tower infrastructure might not be the best option," Pater said.

"Telkom Mobile should continue to explore the possibility of sharing passive infrastructure or leasing part of it from infrastructure companies where possible‚" he added.

Telkom Mobile had 1.56m customers at the end of September.

Ishe Zingoni‚ an analyst at Frost & Sullivan Africa‚ said the mobile business remained a crucial and strategic component of Telkom's overall vision of becoming a truly integrated player. But the fact that it had been a financial drain on Telkom would make this deal particularly pertinent.

"Equally important is the potential to expand the infrastructure available to Telkom through the additional access to base stations‚" Zingoni said. "If the deal materialises‚ this will greatly boost Telkom and put it in a strong position to take on its bigger competitors," he added.