MTN South Africa Completes a Tower Agreement With IHS Towers

Following a lengthy competitive process, telecommunications company MTN South Africa has completed a passive tower infrastructure acquisition with IHS Towers.

The acquisition is expected to occur in the first quarter of 2022, subject to various conditions precedent, including regulatory approvals.

The deal entails the outsourcing of power and related services (“power as a service, or PaaS”) throughout MTN South Africa’s complete site footprint of almost 12 800 sites.

“The offer value is roughly R6.4 billion,” MTN stated, referring to the 5 709 sites and power assets on third-party sites.

One of the key goals of the transaction, according to MTN, was to achieve an “OpCo-friendly” outcome, which aims to ensure a limited financial impact on MTN South Africa’s current running costs versus leaseback costs, improved network performance, including improved power management, and flexibility to maximize the benefit of MTN South Africa’s active network sharing, including current agreements in place with Cell C and Telkom. MTN will also be exposed to local currency because all leaseback payments to IHS would be made in rand.

MTN owns a 29 percent investment in IHS Towers, a Nigerian company created in 2001. IHS is a global leader in the ownership, operation, and development of shared telecommunications infrastructure. In Latin America, the Middle East, and Sub-Saharan Africa, it operates towers.

The MTN-IHS deal follows on the heels of Vodacom Group’s announcement that it will spin off its South African telecoms tower property into a separate firm and may look for partners for the newly formed entity.

The company appeared on the New York Stock Exchange earlier this month, and its market capitalization is estimated to be over $5.2 billion (R80 billion).


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Abdulquadri Ayilara
Abdulquadri Ayilara
Abdulquadri is an intern at Tech with Africa (TWA) in Nigeria when he isn't coordinating building site operations. He covers innovative technology in Africa, construction, and agriculture in his writing.

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