MTN inches closer to tower sale

A report suggests MTN South Africa has entered into formal discussions with American Tower Corp to sell as many as half of its base stations in the country to the tower management company. By Duncan McLeod.

Karel Pienaar

Karel Pienaar

MTN has moved to play down a report that suggested it has entered into “formal discussions” to sell as many as half of its South African base stations to tower management company American Tower Corp.

International telecommunications investment information website TMTFinance.com last week quoted an unnamed source as saying that American Tower, which acquired Cell C’s base station network in 2010 for US$430m, had entered “formal discussions” with MTN which could lead to a private sale, “effectively shortcutting an auction process”.

“MTN South Africa would like to note that such a decision regarding the selling of towers has not been made to date,” says CEO Karel Pienaar in an e-mailed response to a query from TechCentral.

“However, MTN South Africa is looking at a business model and possibly a business case that will best suit the growing organisational needs in this regard as per normal business practice and similar to other MTN operating companies.”

American Tower’s South African CEO, Pieter Nel, declines to comment.

According to TMTFinance, financial services group Citi may have been appointed to advise MTN on the sale.

TechCentral first reported in August 2012 that MTN was mulling the sale of as much as half of its base station infrastructure in South Africa to improve the efficiency of capital structure.

“We have been looking at this for a long time,” Pienaar said at the time.

The MTN group has already concluded deals to sell tower infrastructure in Ghana and Uganda and may do the same in Nigeria, its biggest market, according to reports.

Third-party tower operators Eaton Towers, IHS, Helios Towers and American Tower 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 to the extent that perhaps we could,” Pienaar said last year, explaining why MTN was considering the move. “If you put it into an entity that can leverage it, then you have improved efficiencies.”

He said that if MTN did sell its South African towers, it would retain control of the active radio communication elements on them. In total, MTN South Africa owns 6 000 towers and shares space on a further 2 000 with other operators.  — (c) 2013 NewsCentral Media

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