Airtel to sell its local telecom towers for 390bn/-

22Mar 2016
Our Reporter
The Guardian
Airtel to sell its local telecom towers for 390bn/-

Airtel Tanzania Limited, one of the country’s top mobile phone service and telecom companies, has entered into an agreement with American Tower Corporation for the sale of 1,350 of its communications towers in Tanzania for $179 million (over 390 billion/-).

Christian de Faria

The transaction is expected to be completed during the first half of 2016, subject to customary closing conditions and regulatory approval, according to Airtel Tanzania’s mother company Bharti Airtel.

"The proposed transaction is a continuation of our stated philosophy of divesting passive infrastructure assets and promoting sharing of towers to enhance operational efficiencies that will further the overall growth of telecom services," Christian de Faria, Bharti Airtel’s managing director and chief executive officer for Africa, said in a statement yesterday.

He added that Airtel remained committed to Tanzania and would continue to invest in local operations while offering world-class services to customers.

Under the deal, American Tower may acquire up to 100 additional sites currently in development for an additional consideration. Airtel will be the anchor tenant on the portfolio under a lease with a ten-year initial term, the official statement said.

"We are extremely pleased to announce our entry into Tanzania and expand our partnership with Airtel, one of the world's leading multinational network operators," said Hal Hess, American Tower’s executive vice-president and president (EMEA).

The tower sale agreement will allow Airtel to focus on its core business and customers and significantly reduce its capital expenditure on passive infrastructure.

American Tower is one of the largest real estate investment trusts (REITs) in the world, and currently owns, develops and operates approximately 97,000 communications sites globally.

The company reported a revenue of $4.1 billion in 2014.“With a young, growing population, tremendous growth potential and a complementary location relative to our existing African operations, we view Tanzania as a highly attractive adjacent market opportunity," executive vice-president Hess said in the statement.

Communications is reportedly the fastest-growing economic sector in the country. According to the Tanzania Communications Regulatory Authority (TCRA), the number of mobile phone subscribers grew by 24.9 per cent in 2015 to reach 39.8 million, out of a total population of 47 million-plus.

Vodacom Tanzania, a unit of South Africa's Vodacom and a strong competitor with Airtel Tanzania for the local market, sold its own phone towers in the country to Helios Towers Africa for $75 million in 2013.

Other leading mobile phone operators in the country at present include Tigo Tanzania (part of Sweden's Millicom), Zantel (which was last year purchased by Millicom from Etisalat), and Halotel (owned by Vietnam-based telecoms operator Viettel).