By Cudjoe Kpor
Lagos. October 14, 2012:MTN Group Limited is closing a deal under which more than 1700 of its mobile network towers will be sold in a $284 million transaction to leading African telecoms infrastructure provider headquartered in Nigeria, IHS Holding Limited.
Under the plan, South Africa’s MTN Group, the continent’s leading mobile phone company plans to offload its non-core assets and passive infrastructure while IHS hopes it will drive its vision to be the continent’s leading infrastructure provider.
Both companies announced weekend that they have entered into definitive agreements under which IHS will acquire up to 931 mobile network towers from MTN Cote d’Ivoire for $141 million and up to 827 towers from MTN Cameroon for $143 million.
Under the definitive agreements, IHS will be a 100 per shareholder of the tower companies to be set up in each country to manage the towers and other passive infrastructure. MTN Cote d’Ivoire and MTN Cameroon will, on commercial terms, become the anchor tenants on the towers being purchased for an initial term of 10 years, according to a joint statement pegging number of towers acquired under the deal at 1758.
Both companies say that, “the transactions are expected to close during the first quarter of 2013, subject to customary closing conditions.”
Sifiso Dabengwa, Group President and CEO of MTN Group says that, “the benefits to MTN of monetising our non-core assets and outsourcing passive infrastructure to experienced independent companies such as IHS are considerable.”
According to him, “with a continued commitment to improving the service to our customers, a reduction of our capital expenditure requirements allows us to concentrate on investing in our customer base and implementing additional services to meet the demand for innovative products and data.”
MTN says the sale of towers is in line with its infrastructure sharing strategy aimed at the monetisation of its assets and cost optimisation. The agreements include a commitment from IHS to roll out a build-to-suit programme to support MTN’s future requirements in both countries, as well as pursue opportunities to build tower sites for other wireless operators.
Commenting on the deal, Issam Darwish, CEO of IHS says, “We are delighted to build on our successful partnership with MTN for whom we have previously built and maintained sites in Nigeria and Sudan. Our strong technical capabilities and operational expertise reinforce MTN’s performance-oriented approach and high standards of service.”
IHS, which was founded in 2001, provides services ranging from managed services, deployment and site ownership with operational presence in Nigeria, Ghana, Sudan, South-Sudan and now Cameroon and Cote d’Ivoire.
In the past eleven years, IHS has built over 2,800 sites and with this transaction will increase its sites under management to over 5,500 of which 3,000 are owned, the company says underscoring that the deal will foster its African expansion strategy.
“This transaction is the next step in our strategy for expansion across Africa; we continue to invest in countries with attractive economic and demographic profiles. This transaction firmly positions IHS as a leading mobile tower infrastructure company in sub-Saharan Africa with resources for continued expansion and technological innovation”, adds CEO of the tower company.
Following closing of the contemplated transactions, IHS will become the largest independent tower company in West Africa with a presence in the four largest economies in the region; Nigeria, Ghana, Cameroon and Cote d’Ivoire, the company says.