Third mobile operator Cell C and American Tower Corporation have entered into a definitive agreement for the sale of the operator's existing towers, as well as those towers in the process of construction.
American Tower will buy 1 400 of Cell C's existing towers, and up to 1 800 additional towers that are either under construction or will be constructed over next two years. The companies expect to close the sale of existing towers by early 2011.
The deal is said to be valued at approximately $430 million.
“We believe SA provides a compelling investment opportunity for us, with strong demand for voice and advanced wireless data services. In addition, our newly established presence in SA will provide us with a platform for our future growth in the region,” says Jim Taiclet, chairman, president and CEO of American Tower.
Cell C CEO Lars Reichelt notes that this is an important strategic transaction for Cell C, allowing the company to realise the value embedded in Cell C's passive infrastructure.
Good move
When rumours first circulated earlier this year that Cell C was in talks to sell certain parts of its national network, analysts responded encouragingly.
At the time, BMI-TechKnowledge MD Denis Smit said the tower deal is just one more of Reichelt's shrewd moves in the market over the last year. He welcomed the concept, saying telecoms operators around the world are looking at solutions like this.
Smit added that, with a saturated voice market, all the telcos are looking at data opportunities with more intensity. The tower deal, coupled with Cell C's data network roll-out, puts the mobile operator in a new competing position, he noted.
Related story:
Cell C sets up shrewd tower deal
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