Mobile network operator MTN has accepted to sell 9,151 base stations in Nigeria to IHS Holding, a major mobile telecommunications infrastructure provider in the country.
IHS Holding issued a statement explaining the sale of the network towers as expected to cut down its operating costs, expand data and voice capacity and drive network efficiency.
Later, the network towers will be sold to a newly formed company to be owned jointly by IHS and MTN Group, though IHS will have full control of the business.
“The new towers company will market independent infrastructure-sharing services to internet service providers and other mobile operators within Nigeria. The transaction is considered likely to end within the fourth quarter of 2014,” stated MTN.
MTN Group’s operation in Nigeria is the group’s largest. At the end of June, the company had 58.4 million customers in Nigeria, compared to its South Africa’s 25.3 million subscribers.
Sifiso Dabengwa, the CEO of MTN Group, said, “IHS’s deep knowledge and considerable experience in the sector will help enhance our network uptime as well as drive efficiencies, allowing us to focus on further increasing our own service levels, improving the customer experience and making sure we continue to be the leading operator in Nigeria.”
Meanwhile, the deal is considered ‘a great success’ by IHS, which has secured several tower sale agreements with MTN. Over the past two years, MTN has sold its tower infrastructure in Zambia, Cameroon, Cote d’Ivoire and Rwanda to IHS. The Nigerian sale nearly doubles the number of towers managed by IHS in Africa, bringing the successful transactions to nine.
MTN has not yet revealed the value of the deal though the new towers company has accepted to pay US$500 million of extra investment over four years into maintenance programme and tower upgrades.
More investments will also be made within IHS’s centralized network operations center in Nigeria. IHS also revealed that more cash will be directed to energy efficiency via the distribution of modern generators, batteries as well as optional power solutions to cut down the consumption of diesel.