Just a month after buying over 2,000 towers from Etisalat Nigeria, Africa-focused IHS has said it will create a joint entity with telecoms giant MTN for the management of more than 9,000 sites in Nigeria.
Specifically, MTN will transfer 9,151 mobile…
Just a month after buying over 2,000 towers from Etisalat Nigeria, Africa-focused IHS has said it will create a joint entity with telecoms giant MTN for the management of more than 9,000 sites in Nigeria.
Specifically, MTN will transfer 9,151 mobile network towers it holds in Nigeria to a new company, which it will co-own with IHS. The towerco will, however, have full operational control of the business.
TelecomFinance understands that the deal value is around the US$1.8bn-US$2bn mark. MTN was advised by Citigroup while IHS mandated Goldman Sachs.
The South Africa-based telecoms group first revealed its plan for a shared tower entity when it published its H1 2014 financial results in early August.
The transaction is expected to help MTN reduce its operating costs in Nigeria, drive network efficiencies and further expand its voice and data capacity, the companies said in a joint statement.
Under the agreement, the new company will invest more than US$500m over four years into tower upgrades and a maintenance programme. Co-location on the sites with other mobile operators and ISPs in Nigeria will be introduced.
MTN Nigeria CEO Michael Ikpoki commented: “The separation of MTN Nigeria’s mobile network towers and operation of the underlying towers business by IHS reflects a major part of our strategy to optimise network quality and technological assets towards creating value and driving innovation to meet our customers’ needs now and in the long term.”
The transaction, which requires regulatory approvals, is expected to close in Q4 2014.
IHS said the deal announced today is its ninth tower transaction and the fifth with MTN, after the ones in Cote d’Ivoire, Cameroon, Rwanda and Zambia in 2012 and 2013.
In early August, the towerco also agreed to buy 2,136 sites from Etisalat Nigeria for an undisclosed amount. Since the start of the year, IHS has secured about US$620m in equity and debt funding for acquisitions.
Once the JV deal with MTN closes, IHS said it will manage over 20,000 towers in Africa. By the end of next year, the tower operator plans to have 25,000 sites, CEO Issam Darwish said.
The African tower market is heating up, with Orange and Bharti Airtel also in the process of offloading some of their passive infrastructure in order to cut costs and focus on core operations.
In early July, Helios Towers Africa snapped up 3,100 Bharti towers in four African nations. The Indian giant is looking to sell another 12,000 sites across the continent, possibly to IHS, Eaton Towers and American Tower.
