Swiftnet continued to grow revenue through adapting to changing market conditions and identifying additional opportunities whilst maintaining strong EBITDA margins.
Key strategicOptimise and grow the masts and towers portfolio
Build new towers to meet mobile network operator (MNO) demand
Expand the range of products and services offered
Strategic achievementsEBITDA increased by 10.4% to R990 million
74.9% EBITDA Margin
68 new towers and 8 new in-building solutions sites built
Power-as-Service (PaaS) launched to market and first 18 sites built
ChallengesOngoing loadshedding costs have impacted client's profitability
Customers (MNOs and non-MNOs) prioritising capex for power security over network expansion
Increasing theft and vandalism as high-value backup power systems are built
Swiftnet’s revenue increased by 1.3% to R1 321 million against the prior year. Revenue from growth customers increased by 10.7% to R1 018 million, driven by inflationary escalations, tenancy take-up on the existing portfolio, ongoing equipment upgrades and 5G deployment, as well as new tower builds and in-building solutions (IBS). This growth was offset by a combined 21% reduction in revenue to R303 million from residual terminations by one of the MNO customers and Openserve’s continued optimisation of legacy-based technologies. Swiftnet’s EBITDA increased by 10.4% to R990 million at an EBITDA margin of 74.9%. The improvement in earnings was attributable mainly to the optimisation of tower operating costs and the non-occurrence of once-off transaction advisory costs incurred during the prior financial year.
Our key clients are engaged on a regular basis, allowing us to directly obtain both positive feedback and constructive criticism. Our clients have consistently requested a shorter and easier application process to occupy space on our masts and towers. We are meeting this request through implementing an entirely new automated application system. The system is built on a new technology platform designed for speed, accuracy and transparency. We expect the system will be launched to customers during FY2025. The unstable electricity grid conditions have created an opportunity for a PaaS product. The rollout of PaaS began in the final quarter of FY2024. 18 PaaS solutions were built and connected to customers. We expect to roll out this solution at scale in FY2025.
Our customers seek to continuously improve their network coverage and quality. We optimise returns from our existing portfolio by regularly engaging with customers to ensure their goals are met through upgrades and new installations on our existing portfolio wherever possible. Where our existing portfolio is not capable of supporting customer demands, we pursue existing tower upgrades or new site builds.
Swiftnet achieved a net increase in revenue through inflationary escalations, new tenancies, and existing tenant installation upgrades. This net growth was despite a reduction in revenue from residual terminations by one of the MNO customers and Openserve’s continued optimisation of legacy-based technologies. EBITDA growth was further driven by optimisation of tower operating costs.
Swiftnet enables MNOs to continue to provide network coverage, improve network performance and increase capacity by building new towers, in-building solutions (IBS) sites, and 5G oDAS small cell sites based on market demand. Our proactive site acquisition and permitting initiatives are sufficient to support forecast demand for new site builds.
Currently our customers require an alternative source of power security, allowing them to focus on their core business of network expansion and antennae upgrades on Swiftnet’s masts and towers. PaaS market demand continues to grow in line with the current electricity challenges.
The masts and towers build programme continued during FY2024 with 68 towers and eight in-building solution installations being constructed based on MNO demand, resulting in 4 047 total productive towers.
Based on client priority, FY2024 saw a focus on refining and launching the PaaS product. The first 18 sites were built based on this priority. The solution will be rolled out at scale in FY2025.
Our focus for the upcoming financial year is to:
The new customer platform will more efficiently cover customer demand on established business lines of new tower installations, IBS installations and upgrades to existing installations.
The PaaS rollout will allow our clients to focus on their core business of network upgrades and expansion. Furthermore, the PaaS service provides us with an opportunity for diversifying with a new revenue stream.