Airtel Africa sells Tanzania towers at $175 million
Airtel Africa PLC on Wednesday said that it has agreed to sell Airtel Tanzania’s tower portfolio to a joint venture owned by a subsidiary of SBA Communications Corp. and Paradigm Infrastructure Ltd. for $175 million.
SBA Communications is an independent owner and operator of wireless communications infrastructure, while the UK-based Paradigm Infrastructure is focused on developing, owning and operating shared wireless infrastructure in selected growth markets.
The UK listed, Africa-focused telecommunications operator said this is the latest strategic divestment of its tower portfolio as part of its shift to an asset-light business model focused on its core subscriber-facing operations.
Airtel Tanzania’s tower portfolio comprises around 1,400 towers, which form part of the group’s wireless telecommunications infrastructure network.
As per the agreement, the group’s subsidiary Airtel Tanzania Plc will continue to develop, maintain and operate its equipment on the towers under a separate lease arrangement with the buyer companies.
The transaction is the latest strategic divestment of Airtel’s tower portfolio as it focuses on an asset-light business model and on its core subscriber-facing operations.
Of the entire deal amount, $157.5 million will be payable on the first closing date, which will be in the second half of the group’s current financial year.
The balance amount is payable in instalments upon the completion of the transfer of any remaining towers to the buyer companies.
As per Airtel, it’ll invest around $60 million from the proceeds on network and sales infrastructure in Tanzania and for distribution to the Tanzania government. The rest of the amount will be used to reduce debt at the group level.
Airtel’s Africa deals in telecommunications and mobile money services across 14 countries in Africa including Kenya, Uganda, Nigeria, Zambia among others.
It had in March this year divested from towers portfolio in two of its African market, Madagascar and Malawi, where it sold 1,424 towers for $119 million.
Though there was no immediate reaction from Airtel Tanzania, the fact could be that the firm might have decided to go about it with a separate supplier in an attempt to remain competitive in the market.
Airtel Africa is a provider of telecommunications and mobile money services with a presence in 14 countries across Africa. Its tower portfolio in Airtel Tanzania comprises about 1,400 towers that form part of the group’s wireless telecommunications infrastructure network. As at Q1 2021, Airtel Tanzania had a total of 13.8 million to hold a 27 per cent market share.
Remarks
Raghunath Mandava, the Group Chief Executive Officer said after the initial sales of towes infrastructures in Malawi and Madagascar that with the latest tower transactions, the telco has continued to demonstrate strong execution of its asset monetisation programme.
“Helios Towers has been a partner to our business in some of the OPCOs for many years and we look forward to further expanding this partnership with these new leases as we together seek to improve mobile connectivity and infrastructure across Africa.
“These transactions will also help to improve the mix of our debt and increase its tenor through long term leases, which are largely payable in local currency by our operating entities, while reducing foreign currency debt of the Group.”
What you should Know
Airtel Africa had earlier revealed plans to sell about 4,500 telecommunication towers in five countries including Tanzania and Madagascar to help reduce $3.5 billion of debt and prepare for bond repayments.
The operator had also said that it would dispose of mobile masts in Gabon, Malawi and Chad,
The company said it was constantly seeking to bring down debt, and prefers to do so even faster with the tower deals.
