In its biggest sale of infrastructure to date, South African-headquartered mobile operator MTN has agreed to sell the nearly 10 000 base stations it owns in Nigeria to tower management company IHS Holding.
The sale of 9 151 of MTN’s network towers in Nigeria will reduce its operating costs, drive network efficiencies and further expand its voice and data capacity, the mobile group says in a statement. MTN has not disclosed the value of the deal, although Reuters is quoting unnamed sources as saying it’s worth US$1,8bn (about R19,3bn).
The towers will be sold to a newly created company that will be owned jointly by MTN and IHS. IHS will have full operational control of the business. The new towers company will market independent infrastructure-sharing services to other mobile operators and Internet service providers in Nigeria, according to MTN. The transaction is expected to close in the fourth quarter of 2014.
MTN’s Nigerian operation is the group’s largest. At the end of June, it had 58,4m customers on its books, compared to 25,3m in its home market of South Africa.
“IHS’s deep knowledge and considerable experience in the sector will help drive efficiencies and enhance our network uptime, allowing us to concentrate on further raising our own service levels, improving the customer experience and ensuring we remain the number one operator in Nigeria,” MTN group CEO Sifiso Dabengwa says in the statement.
The deal is a big coup for IHS, which has secured a number of other tower sale agreements with MTN. The mobile operator has sold its tower infrastructure in Cote d’Ivoire, Cameroon, Rwanda and Zambia to IHS in the past two years. The Nigeria sale almost doubles the number of towers that IHS manages in Africa and brings the new of such transactions it has concluded to nine.
As part of the Nigeria deal, the new towers company has agreed to US$500m of additional investment over four years into tower upgrades and a maintenance programme to improve quality of service. Further investments will also be made in IHS’s centralised network operations centre in Nigeria and more money will be directed to energy efficiency through the deployment of advanced generators, batteries and alternative power solutions to reduce diesel consumption. — © 2014 NewsCentral Media