MEA news

A roundup of tower news across SSA and MENA

Algeria: Operators commence 4G deployment; Ooredoo and Djezzy discuss RANsharing

Following the award of 4G licenses to all three of Algeria’s MNOs in May of this year, Ooredoo announced the pre-commercial launch of Algeria’s first 4G network this July in the Tiemcen province with Djezzy expecting to launch 4G services in Q416. The two operators have entered into a RANsharing agreement to explore the more cost effective rollout of their networks, although details of the arrangement and the number of sites which it governs are still to be ironed out.

Burkina Faso, Kenya, Sierra Leone: Orange exits Kenya , enters Burkina Faso and Sierra Leone

Orange has completed the sale of its entire 70% stake in Telkom Kenya to investment firm, Helios Investment Partners, whilst the Kenyan government retains their 30% stake in the operator. Meanwhile, in Sierra Leone and Burkina Faso, Orange has completed the acquisition of Airtel’s opcos in the two markets giving Orange a presence in 21 countries in Africa and the Middle East.

Chad, Ghana, Senegal: Orange enters informal talks with Millicom regarding opcos in Chad, Ghana and Senegal

With Millicom having appointed advisors to oversee their exit from the African market, the company has reportedly entered informal talks with Orange regarding takeovers of its opcos in Chad, Ghana and Senegal. Orange’s takeover of Millicom’s subsidiary in the DRC was completed in April of this year.

DRC: EAIF loans Helios Towers Africa US$20mn as part of $105mn loan syndicate

The Emerging Africa Infrastructure Fund (EAIF) has joined the $105mn syndicated loan facility awarded to Helios Towers Africa to help finance the purchase of Airtel’s 950 towers in the DRC. The syndicate is led by Standard Bank with German Deutsche Investitions und Entwicklungsgesellschaft (DEG) as DFI arranger.

DRC: Yozma Timeturn’s license revoked

After failure to reach operations, seven years after it was awarded its mobile license, Yozma Timeturns is expected to have its license revoked by the DRC regulator. It is expected that Yozma’s license will be re-auctioned in a bid to boost competition in the country.

Egypt: Orange cancels sale of 2,000 towers to Eaton Towers

After having agreed the sale of 2,000 towers (approximately one third of its total portfolio) to Eaton Towers in April 2015, Orange Egypt (formerly Mobinil) has announced that the deal is now off with the operator citing the absence of key regulatory approvals by the initial deadline laid out. Eaton were scheduled to acquire Orange’s stake in the Egyptian Company for Mobile Tower Services (ECMTS – the subsidiary into which Orange had transferred the towers) for US$131.15mn, however regulatory approvals requiring the change in ownership had yet to be granted by the 21 July longstop date. Orange made the decision to not extend the deadline. You will find a detailed analysis of this news later in this journal.

Egypt: Award of 4G licenses nears completion

Fixed line incumbent, Telecom Egypt became the first company to purchase a 4G license in the Egyptian market, marking the entry of a fourth operator into the country’s mobile industry. Whilst it had originally been thought that Telecom Egypt would be forced to divest its 45% stake in Vodafone Egypt, this was not required as a condition of the license.

The three existing MNOs, Orange, Etisalat and Vodafone, had each expressed concerns regarding the amount of spectrum being allocated as well as the regulator’s stipulation that a portion of the license must be paid in dollars and as such failed to reach an agreement with the NTRA by the early August deadline. The NTRA has since agreed to allocate additional frequencies (although no amends have been made to the pricing conditions) and the three MNOs have been given until 22 September to reach a decision on whether they will accept the revised terms.

Kuwaiti-based Zain has reportedly expressed an interest in acquiring a 4G license in Egypt.

Ghana: NCA initiative processes to revoke of Expresso Telecoms’ operating license

Following liquidity challenges and failure to secure the necessary investment, Expresso’s subscriber base has declined significantly over the past few years. Such a decline in subscribers has had a knock on effect on regulator and government revenues, leading to the National Communication Authority initiating a regulatory processes to revoke Expresso’s license.

Kenya: Safaricom’s East African Tower to sell 30 yu towers

Safaricom’s towerco subsidiary, East African Tower, has been given the approval by the Competition Authority of Kenya to sell 30 of the 452 towers it acquired from yu to Kenya Tower for an undisclosed sum. Safaricom’s infrastructure subsidiary, East African Tower, actively pursues co-locations from both Airtel and Orange in Kenyan market, where its main competitor in the towerco space is Eaton Towers.

Kenya: Regulator awards 4G spectrum licenses to Safaricom, Airtel and Telkom Kenya

The Communications Authority of Kenya has awarded 4G licenses to the country’s three MNOs; Safaricom, Airtel and Telkom Kenya. The three MNOs have paid US$25mn each for the 4G concession, with a condition of the licenses being that they each allow smaller operators to use 30% of their network.

Madagascar: ISP Blueline becomes Madagascar’s fourth MNO

ISP Gulfsat Madagascar which operates under the Blueline brand in the country became the country’s fourth MNO after having launched 3.75G in June of this year. The company had been offering mobile broadband services since 2010 under an MVNO arrangement using the network of mobile subsidiary of fixed-line incumbent Telma.

Nigeria, South Africa: MTN Nigeria’s fine resolved; capex spend in Nigeria and South Africa to increase

MTN has committed to spending ZAR11.7bn and ZAR12bn in Nigeria and South Africa respectively in a bid to upgrade its network infrastructure in the two markets. The move comes after one of the most challenging years for the operator after it was find $1.67bn (reduced from US$5.2bn) for its failure to disconnect unregistered SIMs in Nigeria. MTN Nigeria will list on the Nigerian stock exchange..

Nigeria: GSM subscribers approach 150mn, MTN maintain pole position

June figures released by the Nigerian Communications Commission show the number of GSM subscribers in Nigeria has reached 149.18mn active users, up 1.8% on 2015 figures. MTN remains number one in terms of market share, with 39% of subscribers, whilst Globacom has 24%, Airtel 21% and Etisalat 15%. The numbers of CDMA and fixed/ fixed-wireless users continue to decline, down 78.5% and 6.7% respectively.

Nigeria: IHS closes the first in market towerco consolidation with the acquisition of HTN Towers

IHS has completed the acquisition of HTN Towers’ portfolio of 1,211 towers in Nigeria, marking the closure of the first in market towerco consolidation in sub-Saharan Africa. The move further bolsters IHS’ position as the leading independent infrastructure provider in the country with 54% of Nigeria’s 29,190 towers. The deal also includes the transfer HTN’s co-location marketing agreement regarding SWAP Telecoms & Technologies’ 702 towers.

Saudi Arabia: STC and Mobily enter tower joint venture

Following discussions regarding the sale of their towers, number one and number two operator in the Saudi market, Saudi Telecom Company and Mobily, have signed a three-month agreement to explore a joint venture to manage their towers. The joint venture can be extended upon if agreed by both parties, and the two operators are reportedly seeking to expand the relationship to also incorporate number three operator, Zain. Earlier in the year, all three operators were in talks regarding the sale of their assets.

Saudi Arabia: Zain secures US$600mn loan from the Industrial and Commercial Bank of China

Number three operator in the Saudi market, Kuwaiti headquartered Zain has agreed a new US$600mn loan facility with the Industrial and Commercial Bank of China. The funds will be used to repay a previous syndicated loan, led by the Arab National Bank which was signed in June 2016. The new loan, signed for a two year tenor and extendable by an additional twelve months, will reduce financing costs for the operator by SAR175mn over the three year term.

Senegal: Expresso Telecom agrees the sale of 450 towers to new towerco backed by M&A Capital

Sudatel-owned Expresso Telecom has agreed the sale of 450 sites to a newly created towerco backed by investor, M&A Capital. The sale and leaseback transaction also includes first right of refusal on new build for Expresso, with the operator planning to add an additional 200-250 sites in the next twelve months as part of the regulatory mandate for MNOs to increase coverage to underserved areas of the country. Expresso’s proceeds from the transaction are expected to go towards the purchase of a 4G license in the country.

Senegal: Sonatel renews licenses and secures 4G concession

Orange-owned Sonatel has become the first operator to be awarded a 4G license in Senegal. In July, the MNO paid XOF32bn for the license along with a further XOF68bn for the renewal of its  fixed, 2G and 3G licenses. Sonatel was obligated to start commercialisation of 4G within the first two months, and has to reach 70% network coverage in the first five years and 85-90% in the first ten years.

Senegal: Tigo Senegal invests US$195mn in 3G+ upgrades

Number two operator in the Senegalese market, Tigo Senegal has announced plans to invest US$195mn in upgrading its network in the country. The move is thought to be in preparation for the rollout of a 4G network, with the operator looking to follow in Sonatel’s footsteps in acquiring a 4G license in the country.

South Africa: American Tower to acquire Eaton Towers South Africa

Eaton Towers have agreed the sale of their South African business unit and its 300 towers to American Tower, although the acquisition is still subject to certain regulatory approvals. Eaton Towers had established a successful build to suit business in the country with a view to achieving scale to compete in a major tower deal. Whilst Cell C divested their tower portfolio back in 2010, South Africa’s other MNOs are yet to agree a sale, with both Vodacom and Telkom developing their own internal towercos to actively pursue co-locations. As such, the major deal Eaton were looking for had not yet materialised and so the offer from American Tower marked an attractive exit. Should the ~9,000 MTN towers come to market, the acquisition and thus elimination of their major competitor in the country, strengthens American Tower’s position to secure the assets. You will find a detailed analysis of this transaction later in this journal.

South Africa: DPTS files a High Court application to block ICASA LTE spectrum auction

The Department of Telecommunications and Postal Services (DTPS) has requested that the High Court block ICASA’s proposed spectrum auction in the 700MHz, 800MHz and 2,600MHz bands. The DTPS argue that the auction would prevent the entry of new players into the mobile broadband market and recommends that ICASA await the publication of the government’s spectrum policy which is expected before the end of the year. ICASA have initiated an ITA (invitation to apply) process for the auction which is expected to start on 17 January 2017.

South Africa: Blue Label Telecoms’ acquisition of Cell C shares ongoing

The acquisition of a 35% stake in South African MNO, Cell C, by South African pre-paid airtime distributor Blue Label Telecoms is still on track despite the June deadline having expired. The acquisition will dilute the holding of major shareholder, Dubai-based Oger Telecom, with Cell C employees expected to hold 30% and 3C Telecommunications 35% on completion of the deal.

South Africa: PIC abandons sale of Vodacom stake

The Public Investment Corporation (PIC) has called off the sale of its stake in Vodacom Group to a consortium including former Vodacom executive Romeo Kumalo. The sale would have improved Vodacom’s BEE (Black Economic Empowerment) rating, improving its position for ICASA’s upcoming spectrum auction which requires companies to increase black ownership to 30% in order to participate.

South Africa: MTN appoints Vodacom’s Rub Shuter as new CEO 

After the resignation of CEO Sifiso Dabengwa in November 2015, MTN have announced that head of Vodafone’s European cluster, Rub Shuter will be taking over as CEO of MTN Group. Mr Shuter is expected to join MTN early next year, with a start date no later than 1 July confirmed.

Sudan: Bank of Khartoum acquires Etisalat’s stake in Canar

Sudan-based Bank of Khartoum has agreed to acquire Etisalat’s 92.3% stake in Sudanese operator, Canar. The bank, which already owns a 3.7% stake in the company, agreed to pay US$95.2mn for the Etisalat’s shareholding, blocking an earlier offer by Kuwaiti-based MNO Zain. The deal remains subject to certain regulatory approvals.

Tanzania: Airtel, Millicom and Vodacom announce RANsharing initiative 

Tanzania’s three leading MNOs, Airtel, Milicom and Vodacom have announced a RANsharing agreement across six 3G pilot sites to develop a model for the sustainable rollout of mobile broadband to rural areas. With 69% of Tanzania’s population of 49mn living in rural areas, and 3G network deployment currently limited mainly to urban centres, the initiative, designed in collaboration with the GSMA’s Connected Society programme and the Tanzanian government, is part of a plan to bring connectivity to the 13mn citizens currently without internet access.

Tanzania: TTCL to add an addition 50 4G sites in Dar Es Salaam and extend rollout 

Tanzania Telecommunication Company (TTCL) has announced plans to rollout an additional 50 4G sites in Dar Es Salaam, taking their total in the capital up to 75. The company launched its 4G network in December 2015 with a plan to cover all regions of the country within five years. Following the deployment of the 50 new sites in Dar Es Salaam, TTCL will commence the rollout of 4G in the regions of Mwanza, Mbeya, Arusha, Dodoma, Mtwara, Tanga, Kilimanjaro, Iringa, Morogoro and Zanzibar.

Zimbabwe: TelOne creates new wholesale network operations unit 

Fixed line incumbent, TelOne has created a dedicated infrastructure unit in preparation for proposed infrastructure sharing regulations in the country. The new division will pool infrastructure with mobile sister company, NetOne and internet and CDMA fixed-wireless players Africom and Powertel in a bid to extend coverage and reduce network operations costs. Following an audit of the combined infrastructure, TelOne chairman Charles Shamu has stated that private sector players including Econet Wireless and Liquid Telecom will be approached to also pool their infrastructure.

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