Mobile networks in tower-sharing deal

[Image]MTN and Cell C have sold towers to the
American Tower Corporation for almost
R6-billion in total.
(Image: For
more free photos, visit the image library)

[Image] Lars Reichelt, Cell C CEO, says the deal
with ATC will help the network enhance
its service quality and coverage.
(Image: Bongani Nkosi)   

Pearl Majola
MTN Group
+27 11 912 3000
• Binita Jhina
Media manager, Cell C
+27 11 324 8352

Telkom teams up with AT&T
High-speed internet from Cell C
Telkom mobile to launch soon
Cheaper internet for South Africa

Shamin Chibba

Two of South Africa’s leading mobile networks have struck multi-billion deals with Boston-based American Tower Corporation (ATC) for the sale of thousands of mobile towers.

ATC, a tower operator that owns about 33 000 communications sites in seven countries, has reached agreements with both Cell C and MTN within a matter of a month.

In November, Cell C agreed to sell their towers to ATC in a deal worth an estimated R2.97-billion ($431-million) while earlier in December MTN announced they are to jointly establish a tower holding company with the multinational organisation in sub-Saharan Africa. The venture, called TowerCo Ghana, is said to be worth about R2.95-billion ($428-million).

ATC chair Jim Taiclet described South Africa as a compelling investment opportunity for his company.

“There is strong demand for voice and advanced wireless data services. In addition, our newly established presence in South Africa will provide us with a platform for our future growth in the region,” he said.

MTN reduces infrastructure costs

According to the MTN Group’s website, the transaction involved the sale of over 1 800 of MTN Ghana’s existing sites to TowerCo Ghana.

It was agreed that a wholly owned ATC subsidiary would hold a 51% stake – about R1.5-billion ($218-million) – while an MTN Group subsidiary would own 49%.

It is expected that TowerCo Ghana will construct a further 400 sites for MTN Ghana and other operators over the next five years.

Taiclet believes the holding company is well placed to take advantage of the market in the West African country.

“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,” he said.

President of the MTN Group, Phuthuma Nhleko, said sharing infrastructure makes sense for his company as they have been looking to reduce both roll-out and operating costs.

“We have already established a good working relationship with the [ATC] team who have demonstrated their extensive experience in operating towers in both the developed world and in emerging markets,” said Nhleko.

Cell C enhancing their quality

A report on Cell C’s website says that the deal included the sale of 1 400 of their existing towers to ATC as well as 1 800 additional towers that are either under construction or will be constructed in the next two years.

The sale for the existing towers is expected to conclude by early 2011.

Cell C CEO Lars Reichelt said the transaction was a strategic move for the company.

“This allows us to realise the value embedded in our passive infrastructure. We believe our relationship with American Tower will enable us to further enhance the quality and coverage of our network.”

It was confirmed that Cell C would be the anchor tenant on each of the towers being purchased.