By Matt Smith
DUBAI (Reuters) – South Africa’s MTN has agreed to form a joint venture with specialist tower company IHS that will own and operate MTN’s 9,151 transmitter towers in Nigeria, IHS said on Thursday.
The deal is expected to close in the fourth quarter, subject to regulatory approvals, IHS said in a statement.
IHS did not reveal the deal’s value, but a source familiar with the matter told Reuters it was worth around $1.8 billion.
MTN has a 46 percent share of Nigeria’s mobile subscribers, according to the industry regulator, while India’s Bharti Airtel has 20 percent, Globacom 19 percent and Etisalat Nigeria 15 percent.
Building and maintaining mobile communications towers in Africa is typically more expensive than in other regions because of security costs and electricity shortages, while revenue per user is often lower.
That has prompted many operators to sell or lease towers to specialist firms, which can reduce building and maintenance costs. It also allows operators to focus more on marketing and customer service, which become more important as differences in network quality between rival operators diminish.
“The new towers company will market independent infrastructure sharing services to other mobile operators and Internet Service Providers (ISPs) in Nigeria,” the IHS statement said.
The new firm will invest more than $500 million over four years to upgrade towers, boost maintenance and improve service quality, the statement added.
On completion, Lagos-based IHS will manage more than 20,000 towers in Africa. This tower deal is the fifth between IHS and MTN following transactions in Cote d’Ivoire, Cameroon, Rwanda and Zambia in 2012 and 2013.
IHS aims to manage more than 25,000 towers by the end of 2015, it added.
