Telkom continues partnership with Openserve to support long-term expansion and development

Telkom Retains Control of Openserve, Signaling a Shift in Strategy

South African telecommunications company Telkom has announced that it will retain ownership of Openserve, its wholesale and network division, marking a departure from its previous asset-light strategy. This decision contrasts with prevailing regional trends, where many African telecom operators have been divesting non-core assets.

By holding onto these valuable network assets, Telkom positions itself to benefit from future revenue growth opportunities. The company can leverage Openserve's extensive network infrastructure to deliver expanded data services, aligning with a rapidly growing revenue stream tied to the increasing adoption of broadband services nationwide.

Telkom's choice to retain Openserve signals confidence in the strategic importance of owning and controlling its core network infrastructure. This move may challenge conventional industry practices and inspire other African telecom operators to reconsider asset retention.

Keeping control of its network assets ensures greater reliability in service delivery for Telkom. By maintaining Openserve, Telkom aligns itself with South Africa's evolving digital landscape, emphasising resilience and aiming for sustained growth in a market increasingly defined by connectivity demands.

However, this move also presents a blend of potential benefits and challenges for Telkom financially. The company forgoes the immediate liquidity that a sale of Openserve could have generated. Retaining ownership of Openserve gives Telkom the ability to maintain tighter control over key aspects of its operations, including managing costs, enhancing service quality, and implementing new technologies.

Telkom's decision to retain Openserve signifies a strategic focus on long-term growth within its core network infrastructure. This move was part of a broader effort by Telkom to improve liquidity and reduce debt.

In a separate development, Telkom sold its Swiftnet masts and towers business for R6.75 billion ($355.4 million) to a consortium led by Actis and Royal Bafokeng Holdings in March 2024.

Openserve, as a critical provider of broadband infrastructure across South Africa, holds a pivotal role in the telecom sector. By retaining Openserve, Telkom gains the ability to significantly enhance its ability to roll out high-speed fibre and 5G infrastructure. This move may position the company better to meet South Africa's escalating digital demands, better positioning itself in the evolving telecom landscape.

In conclusion, Telkom's decision to retain Openserve highlights a dedication to improving connectivity solutions and addressing the ever-changing requirements of the telecommunications sector. This strategic focus on long-term growth within its core network infrastructure could prove to be a wise move, positioning Telkom for future success in the competitive African telecom market.

Telkom continues partnership with Openserve to support long-term expansion and development