MTN concludes R6.4bn sale of cellphone towers to IHS

MTN has completed the R6.4 billion disposal of its cellphone towers business to IHS Towers, after the transaction was approved by the Competition Commission, it was announced on Wednesday.

The deal involves the acquisition of 5 701 of MTN’s cellphone towers to the NYSE-listed company which is one of the largest independent owners, operators, and developers of shared communications infrastructure in the world by tower count.

IHS Towers will own 70% of the South African towers business with the remaining 30% to be owned by a B-BBEE consortium.  The sale was part of MTN’s asset disposal drive.

MTN South Africa CEO Charles Molapisi, said the partnership brings foreign investment into the market to create greater competition.

“Over the years, MTN SA has built and maintained the best network in the country, and we believe that in IHS, we have found a partner with the necessary experience and expertise to maintain and enhance this critical part of the business,” he said.

MTN had previously stated that proceeds from the transaction would be used to secure high-demand spectrum frequencies and provide it with additional balance sheet flexibility.  The company secured spectrum to the value of R5.2 billion during the March auction.

Under the agreement, IHS Towers is also providing power management services to MTN SA on approximately 13 000 sites, including the acquisition portfolio, across South Africa. The acquisition gives IHS an operational footprint in eleven emerging markets with seven in Africa, with a global tower count of nearly 39 000 towers.

“Through this transaction, IHS has now entered the most industrialised economy in Africa as South Africa’s largest independent tower operator,” said Sam Darwish, IHS towers chair and CEO.

IHS Towers was founded in Nigeria in 2001 and listed on the New York Stock Exchange in November 2021. MTN has a 29% stake in the firm. The company also operates towers in Latin America, the Middle East and sub-Saharan Africa.

It is said that the acquired assets and the provision of power management services across MTN SA’s portfolio are expected to deliver revenue and adjusted EBITDA of approximately $192 million and $85 million in the first full year of operations.

MTN shares lost nearly 3% in the morning trade, after peaking at R167.59. – news24.com