MTN has entered into discussions with fast-growing pan-African mobile phone tower operator IHS Holding with a view to selling its South African tower portfolio, Bloomberg reported on Thursday.

Quoting an unnamed source “familiar with the matter”, the news wire said the deal could be valued at as much as US$2bn (about R26bn).

If the deal goes ahead, MTN will be the second mobile operator in South Africa to offload its tower assets. Cell C sold its towers in 2011 to American Tower Corp in a deal valued at $430m. The debt-laden Cell C used that deal to help reduce its gearing.

According to Bloomberg, MTN would retain a significant stake in a joint venture with a tower company. This is a model MTN has followed in markets in West Africa where it has disposed of tower assets.

Telecommunications operators across Africa are selling their tower assets to reduce costs in competitive markets where prices have fallen sharply and in some cases to help reduce crippling debt incurred in rolling out infrastructure.

According to Bloomberg, MTN South Africa has about 19 000 sites countrywide.

News of a potential sale of towers comes just weeks after Mteto Nyati, a former MD of Microsoft South Africa, took the reins at the local MTN subsidiary. Nyati is talking bullishly about winning market share from rival Vodacom by, among other things, fixing the company’s chronic customer service problems.

MTN’s share price, which has come under significant selling pressure in recent weeks, was trading down by almost 4% at R187,11/share at 4pm on Thursday. The counter has lost ground since MTN reported its interim results on 5 August. In the past year, the share has fallen by more than 21%, pushing its market capitalisation down to R359bn. — © 2015 NewsCentral Media