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Etisalat may sell African telecoms towers

Gareth van Zyl
By Gareth van Zyl, Editor, ITWeb Africa
Johannesburg, 02 Feb 2012

United Arab Emirates (UAE) telecommunications firm Etisalat is considering taking bids for approximately 4 500 of its cellular phone towers in Africa, in a move that could raise $500 million, according to reports.

Etisalat is Egypt's third largest telecoms operator, and also has licences in markets such as Nigeria, Sudan and Tanzania.

Sharing and leasing existing towers has been a common trend in Europe. Telcos in Africa are increasingly adopting this practice too, as they try to cut costs amid falling voice revenues.

Etisalat, in particular, has experienced pressure in the UAE market, where the average revenue per Arab customer has fallen from $35 to $30, according to research from the Arab Advisors Group.

"Etisalat, like other telecom operators in Africa, is constantly evaluating good business opportunities which includes but [is] not limited to infrastructure sharing with other operators," the Abu Dhabi-owned telecommunications company said in a statement today.

"No final decision has been reached at this point in time as [to] selling or sharing towers," it said.

Africa has 100 000 mobile phone towers of which 10 000 are shared and leased, says Rob Gelderloos, chief commercial officer at IHSAfrica, a company that leases out towers on the continent.

Gelderloos further says existing towers could accommodate two to three tenants each, while custom-made towers could have up to six tenants.

The cost of a mobile phone tower ranges from $50 000 to $600 000. Those in areas where there is a lot of interference from, for example, high-rise buildings, are typically priced at the higher end of the range.

"If each tower has two telcos, it immediately doubles the capacity," says Gelderloos.

IHSAfrica already operates towers for Etisalat, but Gelderloos says it is also set to make offers for Etisalat's African towers. "We've already made offers to Etisalat."

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