Vodacom Group will retain full ownership of a new subsidiary that will take over its South African tower business, it said on Thursday, announcing a 5.2% rise in first-quarter revenue.

Formation of the telecommunications tower company, which follows similar actions by Vodacom’s rivals, is not yet complete, CEO Shameel Joosub said.

South African telecoms firms have either carved out tower businesses or sold them to specialist tower companies, a move also seen globally. By doing so, they have raised money for such purposes as funding fast-growing services, such as fintech.

Some have also retained equity in the tower companies.

Vodacom’s tower company will own more than 9 500 sites, including towers and rooftops, the company said in its latest annual report, published earlier this year.

The separation of the South African tower portfolio would enhance asset returns and lower communication costs, Vodacom said, without explaining how. An MD for the subsidiary would be named later.

Vodacom chief financial officer Raisibe Morathi said this year the operator would be open to many options once the tower company had been separated, but “we don’t have any need to monetise. We’re not looking to do this to raise capital.”

Vodacom, majority-owned by Britain’s Vodafone Group, said group revenue for the quarter ended on 30 June had risen to R26.1-billion from R24.8-billion in the same quarter last year, helped by growth in most of its markets and South Africa in particular.  — Reuters