MEA News

A roundup of tower news across SSA and MENA

Congo B, DRC, Ghana, Tanzania: Helios issue $600mn corporate bond

On 8 March 2017, Helios Towers Africa announced its maiden corporate bond. The $600mn bond, paying a 9.125% coupon with a 2022 maturity date, was three times oversubscribed and was assigned a B2 rating by Moody’s. At the same time, Moody’s assigned a B2 Corporate Family Rating to Helios Towers Africa Ltd, the towerco’s first credit rating. The majority of the proceeds will be used to refinance existing debt, with US$31mn being used to fund the acquisition of remaining sites not yet closed in the DRC, Congo Brazzaville and Tanzania. $110mn will be used for planned capital expenditures and $23mn will be required for estimated fees and expenses. $62mn will be used to finance the buyout Vodacom Tanzania’s 23.7% stake and remaining shareholder loans in Helios Towers Tanzania.

Ghana, Kenya, Niger & Uganda: New appointments and a share sale at Eaton Towers

Eaton Towers have announced the appointment of Neil Taylor as Chief Commercial & Legal Officer and Ashutosh Mathur as Group Commercial Director. Neil Taylor served as Millicom’s General Counsel at the time of their tower sale to Helios Towers Africa before assuming a position as Helios’ Chief Legal Officer for five years.  Ashutosh Mathur was part of the core team that oversaw Airtel’s tower divestments across the majority of its markets (and also served briefly at Millicom) and now takes a seat on the buy side of the negotiating table for Eaton. Meanwhile, Standard Chartered Private Equity are looking for a buyer for their stake in the towerco after having invested in Eaton back in 2015 as part of a $400mn consortium.

Ghana: Bharti Airtel and Millicom to combine their Ghanaian operations

Bharti Airtel and Millicom have reached an agreement to merge their opcos in Ghana. The two opcos which currently sit in third and fourth position (amongst a total of nine operators)  have similar market shares, with Airtel securing 12% of the market and TIgo 11%. The transaction is subject to approval from the regulator but if it is given the go ahead, the combined entity will edge past Vodacom, although will still be a distant second to MTN’s 52% share. According to the agreement, the two MNOs will have equal ownership and governance of the entity which will provide the widest 3G coverage in the country.

Ghana: NCA orders MNOs to improve QoS

The Ghanaian telecoms regulator, the National Communications Authority (NCA) has ordered the country’s MNOs to improve quality of service after complaints of call drops, poor voice quality and data speeds. In response to the order, MNOs have highlighted the challenges they face in meeting QoS levels including problems with site acquisition, relating at least in part to restrictions on constructing towers within 400m of an existing one.

International: Information Memorandums out for the sale of Millicom’s stake in Helios Towers Africa

Information Memorandums are now out for the sale of Millicom’s 22.83% stake in Helios Towers Africa. Millicom originally held a 40% stake in joint ventures with Helios’ opcos in Ghana, Tanzania and the DRC after they decided to monetise their assets. The shares were later restructured into a holding at the group level, which Millicom is now looking to monetise. There are certain restrictions on who may purchase the equity, with entities having a significant presence in the tower industry being excluded from potential acquirers. In other news, Millicom have recently appointed Mohamed Dabbour as CEO of their African operations after the departure of Cynthia Gordon. Dabbour was previously serving as the CFO of Millicom’s African business.

Iran: MCI, RighTel and Fanasia form Iranian Towers

Number one and number three operators in the Iranian market, MCI and RighTel have announced the formation of a new towerco, Iranian Towers, in conjunction with Fanasia (the country’s only other towerco). The new towerco will be the exclusive rollout agent for the two operators, sharing the cost of deployment as well as site operations. The first phase of Iranian Towers’ operations will be the construction of approximately 1000 new sites which are capable of accommodating multiple tenants. These sites will be constructed primarily in the major cities in order to accommodate 4G and 4.5G rollout. The new rollout will include both ground based and rooftop sites and will be conducted with the coordination of municipalities who will benefit from revenue sharing on the sites.

Kenya: Merger between Telkom Kenya and Airtel rumoured

After having been taken over by Helios Investment Partners in 2016, Telkom Kenya is reportedly examining potential growth strategies including a takeover of rival Airtel Kenya. Whilst the move may worry anti-competition authorities, a merger of the number two and three operators would produce a more sizeable competitor to market leader Safaricom which holds 69% market share. Telkom Kenya is also in the process of selling its towers where the only transaction completed to date is the sale of Airtel’s sites to Eaton Towers.

Kuwait, Saudi Arabia: Zain tower sales near final stages in Kuwait and Saudi Arabia

Zain is in the final stages of agreeing the sale of its ~1600 towers to Towershare with the deal currently awaiting approval from the country’s telecoms regulator. In Saudi Arabia, the operator is in exclusive negotiations with a consortium involving TASC Towers and Acwa for the sale of their 6,800 towers in the country. The transactions will mark the Middle East’s first major tower transactions.

Madagascar: Orange launch 4G services

Orange have joined competitor TELMA in offering 4G services in Madagascar after having launched operations in the capital, Antananarivo in March 2016. Currently mobile broadband penetration in the country sits at 19%.

Nigeria: Etisalat Nigeria defaults on loan payment to local banks

Etisalat Nigeria is in talks with lenders to restructure its $1.2bn loan after it missed a payment in March. The Central Bank of Nigeria and the Nigeria Communications Commission agreed to pursue a default deal rather than a receivership to avoid further deterring investors and contributing to a wider debt crisis in the country. Ibrahim Dikko, vice president for regulatory affairs at Etisalat Nigeria, said the operator has missed payments due to an economic downturn and currency devaluation in the West African nation, as well as dollar shortages on the country’s interbank market.

Nigeria: MTN pay first installment of NCC fine and push back listing

After having been fined NGN330bn (US$1.6bn) by the Nigerian Communications Commission for a failure to disconnect unregistered SIMs, MTN have paid the first installment of the settlement which is scheduled to be paid over a three-year period. MTN had announced plans to list on the Nigeria Stock Exchange but is looking at pushing back their listing until 2018, citing market uncertainties.

Nigeria: IHS Towers announces vendor upskill programme

IHS Towers, which owns over 50% of Nigeria’s towers has launched a vendor upskill programme in the country. The initiative aims to drive up the service levels of the towerco’s partners, helping them to improve their operations and deployment capabilities and supporting them through their growth. The first phase focussed on designing customised programmes for each vendor in conjunction with a course of workshops and training sessions. The programme has now moved into the second phase, focussed on continuous operational engagement with teams to support them on their day to day challenges. IHS directly and indirectly employ over 11,700 Nigerians.

Oman: STC, Etisalat and Zain submit offer for third license

Saudi Telecom Company, Etisalat and Zain are known to have submitted offers for Oman’s third mobile license. A shortlist of bidders will be published on 14 August with the winner expected to be announced on 4 September. The operator will join Omantel and Ooredoo in a market with 6.6mn connections.

Rwanda: Airtel to use Vanu Rwanda’s new rural wholesale services

Airtel has signed up to as the first operator to use Vanu Rwanda’s solar-enabled wholesale services,  Vanu Rwanda has reportedly secured spectrum from the Rwanda Utilities and Regulatory Authority (RURA) to provide wholesale services in order to bring connectivity to rural areas in the country

Saudi Arabia: Banks bid for advisory role in STC-Mobily joint venture

Investment banks have responded to an RFP for an advisory role in the formation of Saudi Telecom Company and Mobily’s joint venture towerco. The two operators have a combined portfolio of over 22,000 sites, although it is yet to be decided how many will be incorporated into the venture with a substantial degree of parallel infrastructure existing. The structure of the joint venture is still to be decided, with the MNOs considering the involvement of a third party who would take an undetermined stake in the company. With a number of decisions still to be made, the appointment of an advisor marks a key milestone in moving discussions forward

Senegal: Millicom sell Tigo Senegal to Wari for $129mn

Millicom announced that it has reached an agreement to sell its Senegalese business to Wari Group for $129mn. Wari Group is a leading platform for digital financial services in Africa. Speaking on the transaction, Kabirou Mbodje, CEO of Wari commented: “The acquisition of Tigo illustrates how an international group such as Wari, born in Africa, is proud to be at the forefront of driving the shift towards an ecosystem that provides social added value and tailored for Senegalese and African customers’ needs. By pooling the advantages of mobile telephony offered by Tigo and the world of benefits provided by Wari, a leading platform for digital financial services, we combine the expertise, energies and ambitions of our teams and our two groups in order to offer more convenient and affordable services to users.”

South Africa: Telkom examines potential spin-off of infrastructure business

Telkom is reportedly considering the carve out of its tower assets and real estate assets into a separate entity which it may look to monetise through a listing on the stock exchange. Active in both the fixed line and wireless sector, Telkom has one of the largest real estate portfolios in South Africa which executives believe should be contributing more earnings to the business. The company with just 3% of mobile market share currently owns approximately 3500 towers in the South African market which it is looking to carve out with a broader real estate portfolio. To date, Cell C is the sole operator to have monetised its towers in South Africa, agreeing the sale and leaseback to American Tower back in 2010. With its competitors in the market generating revenue from leasing space on their towers, and Cell C voicing concerns over the lease rates due to American Tower, the operator has since begun rebuilding its own portfolio of assets.

Swaziland: New market entrant Swazi Mobile to share towers with MTN

After having been awarded a concession by the regulator in December 2016, fending off competition from Viettel and Orange-backed Mauritius Telecom, newly licensed Swazi Mobile has announced it will be using MTN’s towers to rollout its 2G, 3G and 4G networks. The MNO becomes Swaziland’s second operator in a country with just 995,000 connections and a population of 1.3mn

Zambia: ZICTA to revise licensing framework

The Zambia Information and Communications Technology Authority has announced that it in the process of revising the telecoms licensing framework in the country. Under the new structure, any operator of data services will be allowed to apply for a permit to provide VoIP, enabling the country’s ISPs to extend their services. The news has been welcomed by Vodafone Zambia who currently holds a license restricted to offering internet services only. On successfully obtaining a permit, Vodafone would be able to provide voice over their LTE network, thus introducing competition for MTN, Airtel and Zamtel in the market.

Zimbabwe: Universal Service Fund to invest $250mn to deploy 600 new towers

The Zimbabwean government’s Universal Service Fund will invest $250mn in the deployment of 600 towers in rural areas. The deployment will be managed by the country’s regulator, POTRAZ and will be coordinated with the country’s three MNOs, Econet Wireless, NetOne and Telecel. The three operators will use the towers under a network sharing agreement.

Zimbabwe: Operators reach agreement to share infrastructure

It has been reported that Zimbabwe’s MNOs, Econet Wireless, NetOne and Telecel have reached an agreement to share infrastructure in the country. The government had been keen to promote infrastructure sharing in a bid to reduce costs, however with Econet having invested more heavily in their infrastructure rollout than its two competitors (in which the government has a stake), there had been some concerns voiced from the operator. Econet recently formed Ecotowers in order to manage its passive infrastructure in the country.

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