US towerco American Tower has expanded into the Ugandan market by agreeing to pay US$89m for a 51% stake in a new tower JV with the local operating subsidiary of South Africa-based MTN Group.
The agreement will see the creation of a new JV towerco, ATC…
US towerco American Tower has expanded into the Ugandan market by agreeing to pay US$89m for a 51% stake in a new tower JV with the local operating subsidiary of South Africa-based MTN Group.
The agreement will see the creation of a new JV towerco, ATC Uganda, which will be controlled by a holding company. American Tower will have a 51% stake in the holding and will manage ATC Uganda. The remaining stake in the holding company will be held by MTN Uganda.
According to a statement by the two companies, ATC Uganda will acquire all of MTN Uganda’s 1,000 towers for a price of up to US$175m.
American Tower expects the new JV towerco to build about 280 tower sites over the next three years for MTN Uganda. ATC Uganda will also pursue opportunities to build tower sites for other wireless operators in the country.
The agreement is expected to close in H1 2012.
American Tower already has a JV with MTN in Ghana with a setup similar to ATC Uganda.
The chairman, president and CEO of American Tower, Jim Taiclet, said: “Our strategy is to invest in select African markets with strong wireless growth potential and a positive investment climate.”
Meanwhile, the group president and CEO of MTN Group, Sifiso Dabengwa, stressed that infrastructure sharing makes “absolute sense” for MTN and that the company expected it to play a role in reducing long-term infrastructure costs.
“Because market conditions in each of the markets are unique, we will continue to evaluate infrastructure sharing opportunities on a market by market basis going forward,” Dabengwa said.
American Tower recently acquired towers in Latin America and South Africa. It has also reportedly been looking to expand in India. A local report in September suggested that it had submitted a bid for the India towerco TowerVision.
