MTN may sell SA base stations

Operator could sell as many as 3 000 of its base stations to an independent tower operator. By Duncan McLeod.

Added by Duncan McLeod on 8 August 2012.
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Karel Pienaar

MTN SA is considering selling as much as half of its base station infrastructure in SA to improve the efficiency of its capital structure, says MD Karel Pienaar.

“We have been looking at this for a long time,” according to Pienaar, who says the company is weighing the economic pros and cons of selling the towers.

MTN Group has already concluded deals to sell tower infrastructure in Ghana and Uganda. Third-party tower operators such as Eaton Towers, Helios Towers and American Tower Corp are active across the continent, looking to buy and then manage towers on behalf of mobile operators.

“The reality is, if you look at the infrastructure on the ground, it’s not our core focus, so we don’t leverage it to the extent that perhaps we could,” Pienaar says, explaining why MTN is considering the move. “If you put it into an entity that can leverage it, then you have improved efficiencies.”

If MTN decides to sell the base-station infrastructure, it will be the second mobile operator in SA to do so after Cell C sold most of its towers to American Tower Corp in 2010 in a deal worth US$430m. Cell C used the sale to help reduce the debt on its balance sheet.

Pienaar says if MTN SA does sell its towers, it will offload only the passive components of the infrastructure, meaning it will retain control of the active radio communication elements. However, he says the company is not averse to the idea of selling the active components, too, especially once next-generation long-term evolution networks are in place in SA.

MTN SA will take time to evaluate the opportunities and risks of selling its base stations, with Pienaar saying the SA market is more complex than the other markets, like Ghana, where it has already concluded similar deals.

In total, MTN SA owns about 6 000 towers and shares space on a further 2 000 with other operators.

Pienaar says selling the infrastructure will facilitate competition because it will make it easier for other operators, including new ones, to build radio access networks. He says the additional competition that could be created is “not an issue” for MTN.  — (c) 2012 NewsCentral Media

Share this article

  • BritinSA

    MTN: “always behind the curve…”

  • kernelmann

    I’m not a huge fan of MTN either, but how exactly is MTN behind the curve with a move like this?

  • http://www.facebook.com/wtembe Wandile Tembe

    This is a bad move from MTN. They must keep their base stations and spend some more money on picocells so they will be 100% ready for LTE. They should not pay out the dividend.

  • BritinSA

    Because Cell C did this already, in what, 2010?

    Tower infrastructure should be agnostic so all the providers can get their transmitters up as opposed to the current situation where multiple applications are required for each provider.

    Airlines and IT have understood the benefits of renting equipment rather than owning it for years now.

  • TelcosGuru

    Why do you think it’s a bad move?

  • TelcosGuru

    Good move by the MTN SA leadership. There is a lot of value in the tower assets, and given that the tower management business it’s not the core of MTN it does not make any business sense for MTN to keep the assets. Selling the towers will help regain the capital tight to the assets and will help in injecting much need investment in to upgrading their network to LTE. The investment in LTE should help drive data revenue and create a lot of value for shareholders.

  • http://www.facebook.com/letsholo Ofentse Letsholo

    6k Towers in SA and yet we still don’t get 3G Coverage from MTN…i gaz to email the CEO about this crappy thing.

  • Frank

    Good to hear MTN not make excuses on why they are expensive but rather offload non core elements to have a better value proposition to customers.

  • Frank

    Interesting that Cell C would have foresight do this compared to MTN and Vodacom.

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