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MTN Nigeria in mega deal to sell 9,151 towers

MTN Nigeria in mega deal to sell 9,151 towers.

Africa’s biggest mobile network MTN is selling all its Nigerian cell towers to infrastructure company IHS.

MTN says it has reached an agreement in principle to sell 9,151 of its Nigerian towers to IHS Holding Limited. The transaction is expected to close in the fourth quarter of this year.

The move comes as MTN looks to drive down its operating costs, improve its network efficiencies and expand its voice and data capacity.

“Under the terms of the transaction and subject to requisite regulatory approvals, the 9,151 towers will be transferred to a new company which will be owned jointly by MTN and IHS,” says MTN and IHS in a joint statement.

“IHS will have full operational control of the underlying business. The new towers company will market independent infrastructure sharing services to other mobile operators and Internet Service Providers (ISPs) in Nigeria,” adds the statement.

The mega deal further signals a rapid advance by IHS in Africa.

Completion of the MTN Nigeria tower sale would be the “ninth tower transaction for IHS and its fifth with MTN following the transactions in Cote d’Ivoire, Cameroon, Rwanda and Zambia that took place in 2012 and 2013,” says a statement.

In April this year, IHS also secured $130 million in funding, which added to $490 million raised by IHS in debt and equity in March.

In August, Nigeria's number three mobile network Etisalat sold 2,136 of its mobile towers to IHS. Etisalat has 19 million subscribers in Nigeria, while MTN has over 50 million users in the country.

“On completion of this transaction, IHS will manage over 20,000 towers in Africa,” notes the joint statement by MTN and IHS.

However, there are risks associated with the telecoms infrastructure space in Nigeria owing to high demand for mobile services in a country where there are over 100 million subscribers.

The Nigerian Communications Commission (NCC) has in previous years issued hefty fines to networks such as MTN and Glo Mobile for issues such as dropped calls and insufficient coverage.

But as part of the MTN-IHS deal, $500 million is expected to be pumped into tower upgrades and a maintenance programme over four years, say the two companies.

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