MTN Said to Join Phone Operators’ Planned Sales of Africa Towers

Mar 25, 2014 7:00 pm ET

March 26 (Bloomberg) -- MTN Group Ltd., Bharti Airtel Ltd. and Orange SA are planning to sell mobile tower networks in Africa, the latest examples of telecom operators looking to reduce exposure to costly infrastructure in the region, according to people familiar with the matter.

MTN, based in Johannesburg, is selling towers valued at $1 billion in Nigeria, and Bharti of India is selling about 15,000 of its towers across 17 countries for $2 billion to $2.5 billion, said the people, who asked not to be named because the negotiations are private.

Orange, France’s largest phone company, is looking at disposing of towers in sub-Saharan Africa and Egypt, they said. Bharti’s sale is likely to result in a split of the towers between multiple buyers, one of the people said.

Carriers in Africa are offloading the assets, which cost more to run on the continent than in other parts of the world because of the need for backup generators and batteries to guard against power failures. Towers and the infrastructure that accompanies them can account for more than 60 percent of the expense to build a mobile network, according to data from tower company IHS Holding Ltd.

IHS, American Tower Corp., units of Helios Towers and Eaton Towers Ltd. are considering acquisitions of the MTN and Bharti assets, one of the people said.

These companies, backed by cash from wealthy investors including billionaire George Soros and Goldman Sachs Group Inc., have bought thousands of towers from carriers in the region in the past two years.

Asset Pledge

Partially owned by a Goldman Sachs-led consortium, IHS, which provides mobile phone infrastructure and services, has agreed to buy almost 3,000 towers from MTN in Rwanda, Zambia, Cameroon and the Ivory Coast since 2012. Chief Executive Officer Issam Darwish pledged last year to more than double the company’s assets to 20,000 towers under management by 2016.

Vodacom Group Ltd., Vodafone Group Plc’s African operator, agreed to sell 1,149 phone towers in Tanzania to Helios Towers Africa, backed by Soros, in July.

Spokesmen for IHS, Bharti and Orange declined to comment on the potential deals. A spokeswoman for Helios Towers Africa declined to comment. Representatives of Eaton Towers, American Towers, Helios Towers Nigeria and MTN didn’t immediately respond to requests for comment.

--With assistance from Manuel Baigorri in Madrid and Christopher Spillane in Johannesburg.