MTN demands high-quality network from cell tower bidders

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MTN SA CEO Godfrey Motsa.
MTN SA CEO Godfrey Motsa.

Mobile operator MTN is prioritising a high-quality network as it looks to sell its tower infrastructure in South Africa.

So says MTN SA CEO Godfrey Motsa, in a statement sent to ITWeb, as the company looks to raise capital from the process.

However, the telco did not divulge how much it is looking to raise from the sale.

MTN announced in late 2020 that it was reviewing the strategic and financial merits of a sale and leaseback deal for its South African portfolio of 13 000 telecommunication towers.

Citigroup Global Markets and Standard Bank have been engaged by MTN to act as financial advisors for the proposed transaction.

“MTN SA has recently issued interested parties with an invitation to offer non-binding expressions of interest to the company, as it explores the potential sale and leaseback of its passive tower infrastructure,” the mobile operator says.

According to the firm, following the 2020 announcement, MTN received over 20 expressions of interest from a wide and varied set of industry players, both in SA and abroad.

It notes these interested parties have now been issued a high-level information pack comprising a rigorous list of criteria.

Companies such as Helios Towers are reportedly lining up to purchase the towers from MTN. This after the UK-based telecommunications company and Oman Telecommunications (Omantel), the largest mobile network operator in Oman, this week announced an agreement for Helios Towers to acquire Omantel’s passive tower infrastructure portfolio of 2 890 sites, for a cash consideration of $575 million.

Motsa says the proposed MTN transaction would require the highest quality tower operators to maintain “South Africa’s best mobile network”.

“The past year has seen a dramatic change in how and where communication services are used, and reliable high-speed mobile broadband with extensive reach and coverage has never been more important for South Africans and for the recovery of our economy,” Motsa says.

“This proposed deal must protect and enhance the superior quality experience that we provide our customers, allowing us to maximise the value of our investments, driving efficiencies, and importantly, advancing our transformation agenda.”

Just like other operators in SA, MTN is suffering big losses due to vandalism and theft at cell towers.

Vandalism and battery theft has gotten significantly worse over the last few years, with criminal syndicates increasingly targeting South African mobile operators’ base stations, stealing or vandalising critical infrastructure like batteries, copper cables and diesel.

The theft and vandalism of this infrastructure has resulted in mobile operators losing hundreds of millions of rands.

The multiple repeat incidents sometimes force the operators to abandon base stations due to nonviable replacement costs, thereby adversely impacting network availability or quality in some areas.

MTN says it has managed to consistently widen the gap between itself and its competitors, despite huge shifting demands on data usage during the pandemic, along with operational challenges due to load-shedding and theft.

“The potential tower operator will, therefore, be required to deliver these exceptional levels of network quality that MTN’s customers have come to expect,” it concludes.

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