TowerXchange understands that Etisalat is concurrently seeking a buyer either to acquire Tanzanian subsidiary Zantel, of which Etisalat owns 65%, or to acquire the 600-700 towers Zantel has in the region. Standard Chartered have been appointed as Etisalat’s advisors.
Helios Towers Africa would be favourites to acquire Zantel’s towers, if sold separately, as Chuck Green’s pioneering towerco acquired a 60% stake in a joint venture with Millicom-Tigo in 2010, to which Millicom-Tigo’s 1,020 Tanzanian towers were transferred.
Market conditions in Tanzania appear very favourable to the towerco business model. Tanzania has four licensed tier one mobile network operators; Etisalat’s Zantel, Airtel, Vodacom and Millicom Tigo. There’s room for growth in the market – according to the GSMA, Tanzania has 62% mobile subscriber penetration, growing at 4.4% CAGR 2011-2012, with 75.8% population coverage.
Diesel and maintenance costs push opex in Tanzania to a point where the efficiencies offered by the towerco business model makes sense. Tanzania had 4,593 base stations in 2012, a 25% growth from 2011, of which 1,442 were off grid and another half on unreliable grids experiencing power outages of more than six hours per day – statistics again from the GSMA.
Rumours persist that Etisalat is still seeking to sell it’s 3,000 towers in Nigeria, but securing the buy-in of local stakeholders is believed to continue to hold up any potential transaction.
