Africa’s largest telecom service provider, MTN Group Limited, has finalized the sale of its passive tower infrastructure in South Africa to IHS Towers, one of the world’s largest independent owners, operators and developers of shared telecom infrastructure.
IHS Towers is a Nigeria-based telecom infrastructure firm founded by U.S. telecom tycoon Sam Darwish.
The group is the largest telecom infrastructure group in Africa, Europe, Latin America, and the Middle East by tower count, and the third-largest independent multinational tower company internationally.
The transaction with MTN will see IHS take over 5,709 MTN South Africa towers under a sale and leaseback arrangement, which comprises approximately 4,000 greenfield and 1,700 rooftop sites.
The offer for the tower infrastructure will set MTN on course to unlock value for its shareholders and other stakeholders, as the Ralph Mupita-led telecom behemoth will pocket R6.4 billion ($411.8 million) from IHS in consideration for the assets.
The deal, which is expected to help improve network performance and power management, will include outsourcing power and related services across the MTN South Africa footprint.
Upon the completion of the deal in Q1 2022, IHS will take over 12,800 sites, including 7,100 third-party sites in South Africa, in addition to the 5,709 towers linked to the transaction.
The transaction will enable MTN South Africa to service its retail and wholesale clients more efficiently, while creating substantial value as reflected in the realized proceeds.
The leading telecom services provider noted that the proceeds will be reinvested in strategic growth initiatives, including securing high-demand spectrum frequencies and providing MTN with additional balance sheet flexibility.
The deal comes in the same week that Vodacom, another South African telecom group, disclosed that it would spin off its South African telecom tower portfolio into a separate business.
The move aligns with Vodacom’s strategic agenda and will help transform South Africa’s fiber business.
In October, IHS Towers signed a partnership with the Egyptian authorities and obtained a license from the National Telecom Regulatory Authority to erect and lease telecom towers in Egypt.
Under the deal, IHS will create IHS Telecom Towers Egypt S.A.E., an entity that will offer Darwish an 80-percent stake in the new company.