Vodacom Group outlined plans to take full ownership in a new tower spin-off currently in the works, as the South African operator looks to follow rivals in attempts to monetise the assets.

In its fiscal Q1 2022 (calendar Q2) earnings statement, Vodacom CEO Shameel Joosub noted it was currently in the process of establishing a separate legal entity for its domestic tower assets and intended to announce the MD of the business in due course.

“During the past quarter we made good progress on the optimisation of our assets, which in the medium terms will also positively contribute to bridging the digital divide,” explained Joosub, pointing to the tower company plan.

Vodacom has been talking up its goal to establish a separate tower company for a while, stating in March the business would be one of the biggest in Africa due to its sizeable portfolio.

In total, Vodacom owns more than 9,500 sites, including towers and rooftops.

It aims to use its tower business to enhance asset returns and lower communication costs, although it did not reveal exact details on how it would do this.

By taking full ownership, Vodacom does not plan to generate cash by losing or part-losing ownership of the tower assets, although Joosub said it would explore options for partners once it has been fully established.

Rival MTN Group went down a different route, opting to sell 5,701 towers in South Africa to IHS Towers, a deal which completed last month.

Vodacom reported a 5.2 per cent year-on-year increase in revenue in fiscal Q1, hitting ZAR26.1 billion ($1.5 billion). It does not break out net income figures in quarterly updates.