Vodacom: no plans to sell SA telecoms towers

By Tom Jackson, South Africa 

Vodacom currently has no intention of selling its tower infrastructure in South Africa in spite of the continent-wide trend towards leasing rather than owning towers, saying the market drivers in the country are different to elsewhere in Africa.

BizTechAfrica reported last week analysts said the sale of tower assets by African telecoms operators to independent management firms is a win-win situation, with operators benefitting from reduced costs and buyers obtaining potentially valuable long-term assets.

This followed the latest major tower acquisition, with Eaton Towers purchasing over 3,500 telecoms towers from Bharti Airtel, which is following the likes of Etisalat and MTN Nigeria in selling its infrastructure.

This trend has not been so evident in South Africa however, with Richard Boorman, spokesperson for the country’s largest operator Vodacom, telling BizTechAfrica the company had no plans to sell towers, as it did in Tanzania in 2013, in South Africa, because the drivers are different to other African markets.

“One of the key reasons for doing this type of deal is to facilitate a fast rollout of network coverage, especially if you’re balance sheet constrained,”he said. “We already have extensive coverage in South Africa, and balance sheets are generally pretty healthy, so the basic drivers aren’t there. On top of that, we already have extensive site sharing between the operators.”

He said Vodacom was pursuing a network differentiation strategy that meant it benefitted from owning its own infrastructure.

“We’ve got the most extensive and fastest network in South Africa, which is a key competitive advantage,” Boorman said. “Owning our equipment is the best way of ensuring that we maintain that advantage. If you sell of your equipment and it is then shared by other operators, you can in effect lose the ability to differentiate your service.”


In July of last year Vodacom Tanzania sold 1,149 telecoms towers to Helios Towers.

 

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