MTN, US tower firm team up in Ghana

8 December 2010

MTN and the American Tower Corporation have struck a deal that will see the Pan-African mobile operator’s base station sites in Ghana being sold to their newly established joint venture, TowerCo Ghana.

The new company will be managed by American Tower, which will own a 51% stake in the business, with the remaining 49% belonging to the MTN Group.

The transaction involves the sale of up to 1 876 of MTN Ghana’s existing sites to TowerCo Ghana for approximately US$428.3-million, of which American Tower will pay approximately $218.5-million for its 51% stake in the holding company.

“Creating an independent tower company in Ghana reflects the execution of our strategy to invest in selected African markets with strong wireless growth potential and a positive investment climate,” American Tower Corporation CEO Jim Taiclet in said a statement this week. “As a partner, MTN’s stature, vision and operational experience in Africa are highly complementary.

“Combined with our tower leasing expertise, we believe TowerCo Ghana is exceptionally well placed to maximise the market opportunity in Ghana.”

Reducing infrastructure costs

MTN Ghana will be the anchor tenant, on commercial terms, on each of the towers being purchased. American Tower also expects that TowerCo Ghana will build at least an additional 400 sites for both MTN Ghana and other wireless operators in Ghana over the next five years.

“Infrastructure sharing makes absolute sense for MTN and was a key aspect of the updated strategy outlined to MTN shareholders [in July],” said MTN Group CEO Phuthuma Nhleko.

“We have in the recent past looked at various permutations to reduce our infrastructure roll-out costs as well as the on-going costs of operating our passive infrastructure in our key markets.”

Evaluating markets

Nhleko said that because market conditions in each of the markets were unique, MTN had resolved to evaluate infrastructure sharing opportunities on a market-by-market basis.

“The Ghanaian market has presented us with an opportunity to partner with a leading independent global tower operator,” he said. “We have already established a good working relationship with the team at American Tower, who have demonstrated their extensive experience in operating towers in both the developed world and in emerging markets.”

The transaction is expected to close by early 2011, subject to customary closing conditions.

In November this year, American Tower paid South Africa’s Cell C $430-million for the cellular operator’s 1 400 existing towers, and up to 1 800 additional towers that are either under construction or will be constructed over the next two to three years.

SAinfo reporter

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