South African wireline and wireless telecommunications provider Telkom has suspended plans to sell part of its fibre business, Openserve, according to a statement by CEO Serame Taukobong this week.
It appears that the fixed broadband service offered by Openserve, South Africa's largest telecommunications infrastructure provider, has helped drive the company’s half-year income. Indeed shares in Telkom, reportedly rose after it reported that half-year adjusted headline earnings per share grew by 57.5%.
As Reuters points out, Telkom, which owns a big chunk of the fast-growing home and business fibre market, last year wanted to list the business separately or sell a minority stake in it to unlock more value. Indeed, in early 2023 we reported that Telkom was gauging market interest in the sale of a minority stake in Openserve.
Now, however, Taukobong has stated that discussions or investigations into partnerships for Openserve have been suspended and made it clear that Openserve will remain a core and critical part of the group’s strategy.
Telkom has been investing in migrating customers away from copper-based technology to faster, next-generation network (NGN) offerings such as fibre and 4G/LTE.
NGN revenue now contributes 80.9% to operating revenue, up from 74.4% in the previous period, offsetting the impact of the group’s decision to ditch legacy services.
Telkom has not held onto all its units, however. Earlier this year it confirmed the sale of its tower unit Swiftnet for US$355 million to infrastructure-focused private equity firm Actis.
