MTN is looking to reduce its exposure to costly infrastructure in Africa by selling off cellphone tower networks, say sources close to the matter.
MTN Group, Bharti Airtel and Orange SA plan to sell mobile tower networks in Africa, the latest examples of telecom operators looking to reduce exposure to costly infrastructure in the region.
MTN, based in Johannesburg, is selling towers valued at $1-billion in Nigeria, and Bharti of India is selling about 15 000 of its towers across 17 countries for $2-billion to $2.5-billion, according to those close to the matter, who asked not to be named because the negotiations are private.
Orange, France's largest phone company, is looking at disposing of towers in sub-Saharan Africa and Egypt, they said. Bharti's sale is likely to result in a split of the towers between multiple buyers, said one.
Carriers in Africa are offloading the assets, which cost more to run on the continent than in other parts of the world because of the need for backup generators and batteries to guard against power failures. Towers and the infrastructure that accompanies them can account for more than 60% of the expense to build a cellphone network, according to data from tower company IHS Holding.
IHS, American Tower Corporation, units of Helios Towers and Eaton Towers are considering acquisitions of the MTN and Bharti assets, said one of those involved in the process.
These companies, backed by cash from wealthy investors including billionaire George Soros and Goldman Sachs Group, have bought thousands of towers from carriers in the region in the past two years.
Partially owned by a Goldman Sachs-led consortium, IHS, which provides cellphone infrastructure and services, has agreed to buy almost 3 000 towers from MTN in Rwanda, Zambia, Cameroon and Côte d'Ivoire since 2012. Chief executive Issam Darwish pledged last year to more than double the company's assets to 20 000 towers under management by 2016.
Vodacom Group, Vodafone Group Plc's African operator, agreed to sell 1 149 phone towers in Tanzania to Helios Towers Africa, backed by Soros, in July.
Spokespeople for IHS, Bharti and Orange declined to comment on the potential deals, as did a spokesperson for Helios Towers Africa. Representatives of Eaton Towers, American Towers, Helios Towers and MTN did not immediately respond to requests for comment. – Bloomberg