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Business of Tech

IHS Towers gets regulatory approval for MTN's SA towers

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IHS Towers, one of the largest independent tower infrastructure companies in the world, is acquiring a substantial chunk of pan-African operator MTN's South African tower portfolio on a lease-back arrangement.

This includes 5,701 towers, as well as providing power management services to MTN SA on around 13,000 sites across South Africa.

It is worth ZAR6.4 billion (US$412.7 million), with the expectation that it will deliver revenue and adjusted EBITDA of approximately US$192 million and US$85 million, respectively, in the first full year of operations.

The transaction has received the necessary regulatory approval from the South African Competition Commission.

Planned expansion

IHS is the largest independent multinational towerco solely focused on the emerging markets. The company has nearly 39,000 towers across 11 African and South American markets, including Brazil, Cameroon, Colombia, Côte d’Ivoire, Egypt, Kuwait, Nigeria, Peru, Rwanda, South Africa and Zambia.

"Through this transaction, IHS has now entered the most industrialised economy in Africa as South Africa’s largest independent tower operator," said Sam Darwish, IHS Towers chairman and CEO.

"MTN Group have been a long-term partner of IHS, and I am delighted that we will expand that collaboration and facilitate mobile connectivity in South Africa."

The company will hold 70% of the SA towers business, with the remaining 30% to be owned by a B-BBEE consortium (broad-based Black economic empowerment – a government integration program aimed at addressing the inequalities caused by apartheid).

Full circle

The deal is part of MTN's asset realization program, and was announced in 2021. It has now received regulatory approval.

"With the regulatory approvals and all conditions precedent to the deal finalised, we are pleased to have IHS bring global capabilities to our South Africa network," said Ralph Mupita, MTN group president and CEO.

"Additionally, with this deal, we continue to deliver on our Asset Realisation Programme, strengthening the balance sheet and improving returns."

The potential sale of MTN's South Africa tower business has been on the table since 2020.

*Top image is a picture of a telecoms tower. (Source: Pixabay)

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