MTN SA sells 5 709 towers in the country to IHS Towers for R6.4 billion
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MTN SOUTH Africa yesterday announced the R6.4 billion sale of 5709 towers to Lagos-based IHS Towers, one of the world’s largest providers of telecommunications infrastructure.
As part of the sale and leaseback transaction IHS Towers will provide Power-as-a-Service to MTN SA at about 12800 sites across South Africa, including the acquired 5709 sites.
The deal makes IHS Towers, which is 29 percent owned by the MTN Group, South Africa’s biggest independent tower operator.
Chief executive Sam Darwish said IHS Towers was committed to using its expertise to provide South Africans with “cutting-edge power services” where necessary.
“I am exceptionally proud to announce IHS’s creation of the largest independent tower operator in South Africa, which represents the start of a new chapter in South Africa’s telecommunications infrastructure sector,” said Darwish.
IHS Towers, which listed in New York last month, said it would own 70 percent of the South African Towers business, with the remaining 30 percent owned by an empowerment partner.
The group said it was in negotiations with a consortium of black broad-based economic empowerment (B-BBEE) partners.
“We are in advanced discussions with a consortium of B-BBEE investors, which will be completed in due course,” it said.
IHS Towers declined to make further comments regarding the empowerment investor. Darwish said IHS Towers’ track record of providing fibre connectivity was solid.
“Our long-standing relationship with MTN Group, coupled with our two decades of operation on the African continent and track record of delivering consistently strong network uptime, will enable us to deliver an infrastructure capable of meeting South Africa’s increasingly sophisticated data demands,” said Darwish.
IHS Towers’ global tower count stands at more than 30 500 in Africa, Latin America and the Middle East. MTN SA said the transaction would entail the sale and leaseback of 5709 of MTN SA’s towers, comprising about 4 000 greenfield and 1 700 rooftop sites.
The transaction would also include the outsourcing of power and related services across the entire MTN SA site footprint of approximately 12 800 – thus incorporating an additional 7 100 thirdparty sites.
The transaction would enable it to service its retail and wholesale clients more efficiently while creating substantial value, as reflected in the proceeds realised.
“Proceeds will be reinvested into strategic growth initiatives, such as securing high-demand spectrum frequencies, and providing MTN with additional balance sheet flexibility,” MTN SA said.
It said that the transaction was subject to certain conditions precedent, including regulatory approvals, and was expected to close in the first quarter of next year.
The sale comes as partially stateowned Telkom said it plans to list its masts and towers business, Swiftnet, on the JSE before the end of March next year and use the proceeds to reduce debt and expand the business.
Telkom said last month it was of the view that a separate listing of Swiftnet would affirm the valuation of the masts and towers business and its contribution to the overall valuation of the Telkom business, thereby unlocking further value for Telkom.
BUSINESS REPORT ONLINE