Fears over significant job cuts from the ranks of employees in Bharti Airtel’s African operations have been amplified by the consummation of the deal to sell the mobile operators’ telecommunications towers in Africa. Airtel, with operations in 20 countries across Asia and Africa, weekend, said it has entered into strategic agreement with Helios Towers Africa (HTA), independent telecoms towers company, for the divestment of 3,100 of its towers, in a move many market observers consider as a massive cost optimisation drive. One of the fallouts of this deal, according to industry insiders, may be the shedding of a long train of direct staff and contractors. An informed source inside Airtel Nigeria told BusinessDay that, “some engineers have already expressed fears that they could be thrown into the labour market following the completion of the deal.” Airtel, India’s mobile operator, at the weekend, however said that based on the agreement tower operations-related personnel will be transferred to Helios Towers. This deal expands HTA’s tower coverage in Africa to over 7,800 owned towers. Commenting on the deal, Manoj Kohli, chairman, Bharti Airtel International Netherlands BV (BAIN), said, the agreement is another milestone in Telecoms Company’s growth journey in Africa.
“Airtel however pioneered the concept of a separate tower entity to promote infrastructure sharing in India and this agreement is a continuation of that philosophy” said the Bharti Airtel Chairman. The transaction, he went on, is a important step towards the consolidation of tower assets across Africa that will drive industry-wide cost efficiencies through infrastructure sharing. “The agreement will further benefit the environment by avoiding duplication of infrastructure”, he added. Bharti Airtel entered Africa vibrant telecoms market, with the $9 billion acquisition of Kuwaiti telecoms group Zain’s operations in the continent in the year 2010. Nigeria, Africa’s largest economy, happens to be one of Airtel’s largest markets on the continent. As at February 2014, Airtel recorded total customer base of 26.2 million. The telecoms company has an estimated 6,000 towers in the country. With this agreement, market observers are of the view that Bharti Airtel now has considerable first-mover advantage in Africa’s highly competitive telecoms market where the cost of managing mobile networks is doubling on a year-on-year basis. The agreements however, while allowing Bharti Airtel to focus on its core business and customers, would also enable it to deleverage through debt reduction, the company said.
The deal, analysts had earlier said is valued at about $3 billion. The deal will reduce ongoing capital expenditure on passive infrastructure, according to Airtel. For Chuck Green, chief executive officer of HTA, the deal is a ground-breaking move for HTA. He added that Airtel’s decision is a significant endorsement of HTA’s reputation, management team and operating track record. “HTA is proud to be chosen by Airtel as its partner for the ownership and management of its existing infrastructure”, he said. With HTA being solely focused on providing telecoms infrastructure solutions, the company helps its customers to achieve their goals of reducing operating cost, improving uptime, preserving capital, focusing on their core business, and mitigating the proliferation of towers through infrastructure sharing, as they expand network coverage and capacity to meet demand and improve quality of service. The agreement is subject to statutory and regulatory approvals in the respective nations.
Ben Uzor Jr
