JSE-listed MTN and IHS yesterday evening said they had agreed that IHS would buy almost 2 000 towers from MTN for $248 million - or about R2.1 billion.
Nigeria-based IHS, which was established in 2001, provides managed services, deployment and site ownership services in the telecoms sector. It has operations in Nigeria, Ghana, Sudan, South-Sudan and now Cameroon and Cote d'Ivoire after the MTN deal.
IHS will acquire up to 931 mobile network towers from MTN Cote d'Ivoire for $141 million and up to 827 towers from MTN Cameroon for $143 million. IHS will be a 100% shareholder of the tower companies to be set up in each country to manage the towers and other passive infrastructure.
MTN's units in Cote d'Ivoire and Cameroon will become the anchor tenants on the towers being purchased for an initial term of ten years. In the past eleven years, IHS has built more than 2 800 sites and with this transaction will increase its sites under management to more than 5 500, of which 3 000 are owned.
"The benefits to MTN of monetising our non-core assets and outsourcing passive infrastructure to experienced independent companies such as IHS are considerable," says president and CEO Sifiso Dabengwa.
Dabengwa says trimming MTN's capital expenditure will allow it to invest in its customer base, currently at 176 million, and implement additional services to meet the demand for innovative products and data. The group aims to spend about R24.7 billion in its infrastructure this year.
The sale of towers is in line with MTN's infrastructure-sharing strategy aimed at monetising its assets and optimising costs. The agreements include a commitment from IHS to roll out a build-to-suit programme to support MTN's future requirements in both countries, as well as pursue opportunities to build tower sites for other wireless operators, says the cellular company.
Issam Darwish, CEO of IHS says: "This transaction is the next step in our strategy for expansion across Africa; we continue to invest in countries with attractive economic and demographic profiles."
After wrapping up the deal, IHS expects to become the largest independent tower company in West Africa with a presence in the four largest economies in the region: Nigeria, Ghana, Cameroon and Cote d'Ivoire.
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