IHS Towers acquires MTN’s over 5000 telecom towers at $412 million in South Africa

In a deal that will see the MTN group forfeit some of its towers to one of the largest telecommunications infrastructure providers in the world by tower count, IHS Towers has signed agreements to acquire 5,709 telecommunication towers from MTN, headquartered in Johannesburg, South Africa for $412 million.

The deal will see IHS provide Power-as-a-Service (PaaS) to MTN at approximately 12,800 sites across South Africa – including the acquired 5,709 sites. The acquired assets and the provision of PaaS across MTN’s portfolio will expectedly deliver revenue and adjusted EBITDA of $220 million and $80 million, respectively in the first full year of operations.

In addition, further growth is expected through a multi-year commitment for a portion of MTN’s new towers.

What they are saying

Sam Darwish, IHS Towers Chairman and CEO commented that he was exceptionally proud to announce IHS’ creation of the largest independent tower operator in South Africa as it represents the start of a new chapter in South Africa’s telecommunications infrastructure sector.

He said, “The country has a growing population of almost 60 million people and we are committed to utilizing our operational expertise to invest in the towers acquired and provide cutting edge power services where necessary.”

He added that the company’s long-standing relationship with the MTN Group, coupled with its two decades of operation on the African continent and track record of delivering consistently strong network uptime will enable the company 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 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.”

What does this mean

• The Transaction will push IHS Towers to enter the most industrialized economy in Africa, and also make IHS Towers the largest independent tower operator in South Africa as well as position it to leveraging its operational expertise to invest in new infrastructure that helps to accelerate the roll-out of new technologies and delivery of efficiencies for existing infrastructure.
• The deal also qualifies IHS Towers to own 70% of the South African Towers business with the remaining 30% owned by a B-BBEE consortium. Though, the company has said it is having discussions with a consortium of B-BBEE investors, which will be completed in due course.