MTN to sell its South Africa cellphone towers to IHS in a US$413.5m deal

SOUTH AFRICA – MTN South Africa has reached an agreement to sell its cellphone towers to IHS Towers for R6.4 billion (US$413.5 million), in a transaction that would help bolster the company’s arsenal for the anticipated auction of spectrum.

MTN is selling and will lease back, 5,709 of its towers in South Africa, which include some 4 000 “greenfield” and 1,700 rooftop sites.

The telco will also outsource power and related services.

“Proceeds will be reinvested into strategic growth initiatives, such as securing high demand spectrum frequencies, and providing MTN with additional balance sheet flexibility,” the company said.

The deal has been described as part of the company’s key asset realization program and is expected to be finalized in the first quarter of 2022, subject to regulatory approvals.

The company added that it has barter arrangements on approximately 2 000 sites which are not being monetized as part of the current transaction.

"Proceeds will be reinvested into strategic growth initiatives, such as securing high demand spectrum frequencies, and providing MTN with additional balance sheet flexibility"

MTN has a 29% stake in IHS Towers, which was founded in Nigeria in 2001. IHS is one of the largest independent owners, operators, and developers of shared telecommunications infrastructure in the world and operates towers in Latin America, the Middle East, and sub-Saharan Africa.

The company earlier in November 2021 listed on the New York Stock Exchange and has a market value of around US$5.2 billion (R80 billion).

Increasingly, mobile operators are using their tower assets to realize value.

Just a few days ago, another telco Telkom said it expects to list its masts and towers business on the Johannesburg Stock Exchange (JSE) by March 2022, as part of its ongoing strategy to unlock value.

The business is operated by Telkom’s subsidiary company, Swiftnet, and operates 6,225 cellphone masts and towers in South Africa.

Vodacom also revealed that it was considering a separate listing of its financial services business in South Africa to unlock value.

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