MTN to sell its towers in Nigeria

18 Views Comments

mtnnigeria

MTN on Thursday announced a sale and leaseback agreement of 9,151 cellphone towers in Nigeria with IHS Holdings.

MTN said that in partnership with IHS, it would invest R5bn over the next four years in upgrading its Nigerian network. The deal sees IHS gaining full operational control of the towers, allowing the infrastructure to be shared with other networks in Nigeria.

MTN executive for corporate affairs Chris Maroleng said: “The financial terms of the transaction will not be disclosed, suffice to say the valuation was mutually satisfactory and reached after a competitive auction process.”

Mergence analyst Peter Takaendesa said: “As markets mature, tower sales and sharing makes commercial sense as competitive advantage shifts from network coverage to differentiation by qua-lity of service and cost efficiencies.

“The regulator has recently sanctioned mobile operators in Nigeria for poor network quality of service, which suggests there is still room to compete on network coverage and capacity in the country,” Mr Takaendesa said.

Nigeria now accounts for a bigger portion of MTN’s revenue and profits than South Africa does, but with market penetration of about half that of South Africa.

The announcement on Thursday was the ninth tower transaction for IHS and its fifth with MTN following the transactions in Côte d’Ivoire, Cameroon, Rwanda and Zambia that took place in 2012 and last year. On completion of the deal, IHS will manage more than 20,000 towers in Africa.

JM Busha Asset Managers head of equities Farai Mapfinya said Nigeria was still critical for MTN. “We think it is still a growth market and remains critical, both on voice and data.”

MTN on Thursday announced a sale and leaseback agreement of 9,151 cellphone towers in Nigeria with IHS Holdings.

MTN said that in partnership with IHS, it would invest R5bn over the next four years in upgrading its Nigerian network. The deal sees IHS gaining full operational control of the towers, allowing the infrastructure to be shared with other networks in Nigeria.

MTN executive for corporate affairs Chris Maroleng said: “The financial terms of the transaction will not be disclosed, suffice to say the valuation was mutually satisfactory and reached after a competitive auction process.”

Mergence analyst Peter Takaendesa said: “As markets mature, tower sales and sharing makes commercial sense as competitive advantage shifts from network coverage to differentiation by qua-lity of service and cost efficiencies.

“The regulator has recently sanctioned mobile operators in Nigeria for poor network quality of service, which suggests there is still room to compete on network coverage and capacity in the country,” Mr Takaendesa said.

Nigeria now accounts for a bigger portion of MTN’s revenue and profits than South Africa does, but with market penetration of about half that of South Africa.

The announcement on Thursday was the ninth tower transaction for IHS and its fifth with MTN following the transactions in Côte d’Ivoire, Cameroon, Rwanda and Zambia that took place in 2012 and last year. On completion of the deal, IHS will manage more than 20,000 towers in Africa.

JM Busha Asset Managers head of equities Farai Mapfinya said Nigeria was still critical for MTN. “We think it is still a growth market and remains critical, both on voice and data.”

In : Technology

About the author

Nigerian Community,News, Events and more