Congratulations to IHS Africa on their acquisition of 1,758 towers from MTN in Cote d’Ivoire and Cameroon. The cost per tower is US$151.5k in Cote d’Ivoire (US$141m purchase price) and US$173k in Cameroon (US$143m). While one needs to know the lease rate to evaluate the deal properly, industry commentators agree that MTN realized a good price, while IHS Africa have paid a justifiable premium to cement their place among the most credible independent tower companies in Africa. Indeed, this deal makes IHS Africa the largest independent tower company in West Africa with a presence in the four largest economies in the region; Nigeria, Ghana, Cameroon and Cote d’Ivoire. Unlike MTN’s previous joint venture deals with American Tower in Ghana and Uganda, in which they retained a substantial equity stake, MTN has parted with 100% of the equity in Cote d’Ivoire and Cameroon. As usual, MTN becomes an anchor tenant. IHS Africa has made build-to-suit commitments. The initial term is 10 years. Citibank served as MTN’s advisers on the deal. The transactions are expected to close during the first quarter of 2013, subject to the usual closing conditions.
Operator Market Share, Cameroon
TowerXchange have requested an interview with Issam Darwish, CEO of IHS Africa, but whilst he and his team are currently doubtless deeply embedded in the migration of assets and novation of leases, here’s some quotes from IHS Africa’s press release about the deal, just in case you haven’t seen them.
“The benefits to MTN of monetising our non-core assets and outsourcing passive infrastructure to experienced independent companies such as IHS are considerable,” said Sifiso Dabengwa, Group President and CEO of MTN Group. “With a continued commitment to improving the service to our customers, a reduction of our capital expenditure requirements allows us to concentrate on investing in our customer base and implementing additional services to meet the demand for innovative products and data.”
“We are delighted to build on our successful partnership with MTN for whom we have previously built and maintained sites in Nigeria and Sudan. Our strong technical capabilities and operational expertise reinforce MTN’s performance-oriented approach and high standards of service,” said Issam Darwish, CEO of IHS Africa. “This transaction is the next step in our strategy for expansion across Africa; we continue to invest in countries with attractive economic and demographic profiles. This transaction firmly positions IHS as a leading mobile tower infrastructure company in sub-Saharan Africa with resources for continued expansion and technological innovation.”
Cameroon market overview
Population: 20m
Mobile subscribers: 10.5m
Mobile penetration: 52.4%
GDP per capita (PPP current USD): $2,383
Internet users per 100: 5
(Source: World Bank, 2011)
Population coverage: 85%
ARPU: MTN reports US$6.2
(Sources: MTN and Orange Quarterly reports, Spring 2012)
Cote d’Ivoire market overview
Population: 20.2m
Mobile subscribers: 15.6m
Mobile penetration: 86.4%
GDP per capita (PPP current USD): $1,803
Internet users per 100: 2.2
(Source: World Bank, 2011)
MTN in Cote d’Ivoire
Market share: 37-40%
Subscribers: 6,305,000
ARPU: US$6.1
(Sources: MTN Quarterly report, Spring 2012)
