Africa’s largest mobile operator, MTN, has concluded the sale and leaseback of its SA towers with Nigeria’s IHS Towers in a R6.2bn deal that aligns with MTN’s goal of exiting noncore assets.
MTN said on Wednesday it will reinvest the proceeds into strategic growth initiatives, such as securing high-demand spectrum frequencies.
MTN will sell and lease back 5,709 of its towers in SA, comprising about 4,000 greenfield and 1,700 rooftop sites.
The transaction will also include the outsourcing of power and related services across the whole MTN SA footprint of about 12,800 sites, thus incorporating an additional 7,100 third-party sites.
Mobile phone companies have been offloading towers and masts to dedicated infrastructure companies and renting them back, allowing them to raise money to expand their networks and wipe out maintenance costs.
In a sign of the times, competitor Telkom is in the process of listing its masts and towers division, estimated to be worth R13bn, as a separate company, Swiftnet, on the JSE.
At the turn of the century and in the 2010s, operators raced to see who had the most cellphone towers. The next frontier for the likes of MTN is building fibre networks as online consumption rises. If operators want customers to consume more data, a big revenue driver for industry, this infrastructure should be in place.
MTN has concluded similar deals in a number of the other countries in which it operates, with SA being the last major market to undergo the switch.
The deal, which is still subject to regulatory approvals, is expected to close in the first quarter of 2022.
MTN is also a 29% shareholder in IHS, which recently made its US stock market debut. In June, the company estimated the value of that investment at R30.5bn.
MTN shares were down a marginal 0.42% at R157.26 on the JSE, valuing it at R296.32bn.
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