MTN SA is considering selling as much as half of its base station infrastructure in SA to improve the efficiency of its capital structure, says MD Karel Pienaar.
“We have been looking at this for a long time,” according to Pienaar, who says the company is weighing the economic pros and cons of selling the towers.
MTN Group has already concluded deals to sell tower infrastructure in Ghana and Uganda. Third-party tower operators such as Eaton Towers, Helios Towers and American Tower Corp are active across the continent, looking to buy and then manage towers on behalf of mobile operators.
“The reality is, if you look at the infrastructure on the ground, it’s not our core focus, so we don’t leverage it to the extent that perhaps we could,” Pienaar says, explaining why MTN is considering the move. “If you put it into an entity that can leverage it, then you have improved efficiencies.”
If MTN decides to sell the base-station infrastructure, it will be the second mobile operator in SA to do so after Cell C sold most of its towers to American Tower Corp in 2010 in a deal worth US$430m. Cell C used the sale to help reduce the debt on its balance sheet.
Pienaar says if MTN SA does sell its towers, it will offload only the passive components of the infrastructure, meaning it will retain control of the active radio communication elements. However, he says the company is not averse to the idea of selling the active components, too, especially once next-generation long-term evolution networks are in place in SA.
MTN SA will take time to evaluate the opportunities and risks of selling its base stations, with Pienaar saying the SA market is more complex than the other markets, like Ghana, where it has already concluded similar deals.
In total, MTN SA owns about 6 000 towers and shares space on a further 2 000 with other operators.
Pienaar says selling the infrastructure will facilitate competition because it will make it easier for other operators, including new ones, to build radio access networks. He says the additional competition that could be created is “not an issue” for MTN. — (c) 2012 NewsCentral Media
