Nigeria-based telecommunications infrastructure group IHS Holding Limited has signed an agreement to acquire India cellular services major Bharti Airtel Ltd's over 1100 telecoms towers Zambia and Rwanda, as per a press release.
Financial details of the deal however have not been disclosed.
The deal will help Airtel to focus on its core business and customers, enabling it to deleverage through debt reduction, the statement said. Also, this would allow the company to significantly bring down its on-going capital expenditure on passive infrastructure in these African markets.
Under the agreement, Airtel has agreed to sell and lease back over 1100 towers from IHS in Zambia and Rwanda under a 10-year renewable contract, the statement said.
“We are delighted to partner with IHS, which has a proven track record in passive infrastructure management in Africa and look forward to working with them. This agreement will accelerate infrastructure sharing amongst operators and benefit customers in form of affordable tariffs and wider network coverage,” Christian de Faria, MD & CEO – Africa, Bharti Airtel said in the statement.
For Bharti, this is the fourth such deal this year.
Last month, it signed a deal to sell over 4,800 communications towers in Nigeria to NASDAQ-listed American Tower Corp for $1.05 billion.
Before that, it had signed an agreement for the divestment of over 3,500 telecom towers spread across six African countries to Eaton Towers, an independent telecom tower company in Africa, and also to sell 3,100 towers in four countries in Africa to Helios Towers Africa (HTA) in a separate deal.
The asset sale and leaseback agreements (which allows it to keep using the towers) is part of the overall strategy of the company to sell off its 15,000 towers to independent tower companies in the continent.
Bharti Airtel has operations in 20 countries in Africa after snapping the assets of Kuwait’s Zain in the continent for $9 billion in 2010.
For IHS, the deal will help it to expand its footprints to over 21,000 towers across five countries in Africa, and will also drive cost efficiencies throughout the industry via the use of shared passive infrastructure.
“We have been working with Airtel for many years. And we are very pleased to have signed our first Buy and Lease Back transaction with Airtel.The opportunity to expand our East African business bringing IHS’ market leading energy and infrastructure management practices to a wider market is an excellent opportunity,” Issam Darwish, Executive Vice Chairman and Group CEO of IHS, commented.
IHS Towers has operations in Nigeria, Cameroon, Côte d’Ivoire, Zambia and Rwanda and following these transactions, it will manage over 21,000 towers in Africa.
The agreements, which was signed between IHS and Bharti Airtel’s subsidiary Bharti Airtel International (Netherlands) BV (Airtel), are subject to statutory and regulatory approvals.