South Africa-based MTN is to form a mobile towers joint venture with IHS for the mobile operator's Nigerian business, with reports estimating the value of the deal at around $2 billion (€1.5 billion).
Sifiso Dabengwa, MTN Group CEO
Under the terms of the agreement, MTN's 9,151 mobile network towers in Nigeria will be transferred to a new company jointly owned by MTN and IHS, which specialises in the operation of mobile towers. The transaction is subject to regulatory approval and is expected to close in the fourth quarter of this year.
IHS said the transaction is expected to reduce MTN Nigeria's operating costs, drive network efficiencies and further expand the operator's voice and data capacity.
"IHS' deep knowledge and considerable experience in the sector will help drive efficiencies and enhance our network uptime, allowing us to concentrate on further raising our own service levels, improving the customer experience and ensuring we remain the number one operator in Nigeria," said Sifiso Dabengwa, group president and CEO of MTN Group.
The companies did not release a value, but Reuters, quoting unnamed sources, said the deal is understood to be worth around $1.8 billion. Bloomberg, also citing sources, put the value at about $2 billion.
The new towers company has also committed more than $500 million of additional investment over four years into tower upgrades and maintenance to improve the network's quality of service.
IHS said the new company would also market independent infrastructure sharing services to other mobile operators and ISPs in Nigeria.
Once the transaction in Nigeria has been completed, IHS said it would manage a total of more than 20,000 mobile towers in Africa. The company also noted that this is its ninth tower transaction and its fifth with MTN following transactions in Cote d'Ivoire, Cameroon, Rwanda and Zambia that took place in 2012 and 2013.
MTN is the largest mobile operator in Nigeria in terms of subscribers. According to figures released in April by the Nigerian Communications Commission, MTN has a 46 per cent market share with more than 58 million subscribers. Airtel is in second place with a 20 per cent share, followed by Globacom (19 per cent) and Etisalat (15 per cent).
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