BusinessDay

IHS buys MTN’s towers, becomes largest asset owner in SA

IHS Towers has signed agreements to acquire MTN’s 5,709 towers in South Africa to make it the largest independent telecom asset operator in the country in a deal worth $412 million. The tower operator is entering the South African market for the first time.

The agreement also sees IHS Towers provide Power-as-a-Service (PaaS) to MTN at approximately 12,800 sites across South Africa (including the acquired 5,709 sites). That means IHS will own 70 percent of the South African towers business with the remaining 30 percent owned by a Broad-Based Black Economic Empowerment (B-BBEE) consortium.

IHS Towers said it is in advanced talks with a consortium of B-BBEE investors and hopes to complete it soon. B-BBEE is an integration programme launched by the South African government to reconcile South Africans and address the inequalities of apartheid by attempting to compensate for land that was repossessed from Africans.

“Our long-standing relationship with MTN Group, coupled with our two decades of operation on the African continent and track record of delivering consistently strong network uptime, will enable us to deliver an infrastructure capable of meeting South Africa’s increasingly sophisticated data demands. Although we have expanded into new regions over the last two years, this agreement is a testament to our continued commitment to facilitating mobile connectivity across the African continent. With this Transaction and our partnership with the Egypt Digital Company for Investment as announced last month, IHS now has a footprint in seven African markets, in addition to our four newer markets in Latam and MENA.”

Read also: PSB: Why MTN, Airtel Africa unlikely to replicate mobile money success in Nigeria

The acquired assets as well as the provisions of PaaS across MTN’s portfolio are expected to deliver revenue and Adjusted EBITDA of approximately US$220 million and US$80 million, respectively, in the first full year of operations (based on a current exchange rate). Further growth is expected through a multi-year commitment for a portion of MTN’s new towers.

In 2014, IHS acquired a total of 10,966 towers out of which 4,154 came from MTN Nigeria and 2,116 towers from 9Mobile. It further acquired 4,696 towers from MTN Nigeria in 2015.

Today the Company has more than 30,500 towers across its nine markets, including Brazil, Cameroon, Colombia, Côte d’Ivoire, Kuwait, Nigeria, Peru, Rwanda, and Zambia.

Get real time updates directly on you device, subscribe now.