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[July 10, 2014]
Helios To Become Largest Independent Tower Company In Africa With Airtel Deal [Ventures Africa]
(Ventures Africa Via Acquire Media NewsEdge) VENTURES AFRICA – With its announced deal to purchase 3,100 telecom towers from Bharti Airtel, Helios Towers Africa is set to become the largest independent tower company in Africa the continent with a portfolio of 7,800 towers.
Jointly owned by Helios Investment Partners, Quantum Strategic Partners, Albright Capital Management, RIT Capital Partners and the International Finance Corporation, HTA has been steadily increasing its acquisition of telecom towers in Africa.
On the other hand, Bharti Airtel has been looking to sell its tower portfolio for the past year to reduce the high costs of running the infrastructure that have been weighing down the company's consolidated results. In this deal with HTA, Bharti Airtel will sell over 20 percent of its telecom tower portfolio in Africa, part of a strategy to sell-off its 15,000 towers to independent tower companies.
Though estimated by Economic Times as between $2.5 and $3 billion, the two companies did not disclose the financial size of the 3,100-tower deal, Bharti Airtel did however state that the proceeds would help its 0.12 percent pare debt. The deal will also help reduce the world's fourth largest telecom company's ongoing capital expenditure on passive infrastructure and help it focus on its core telecom business and customers.
The Indian telecom major also added that the deal will help improve efficiencies as HTA, being solely focused on providing telecom infrastructure solutions, would help in reducing operating cost, preserving capital, and mitigating the proliferation of towers through infrastructure sharing.
HTA already operates in Ghana, Tanzania and the Democratic Republic of Congo but neither company disclosed the four countries where the towers which are part of the agreement are located. However, it is suspected that one of those countries could be Nigeria given the reports earlier in the year of a planned sale of Airtel's towers in Nigeria As part of the deal, Bharti Airtel will have full access to the towers from HTA under a long term lease contract and the tower operations-related employees will be transferred from Airtel to HTA.
Bharti Airtel's Africa business is yet to make a profit. For the fiscal fourth quarter which ended March 31, its Africa revenue declined by 1.7 percent while net loss increased to $124 million.
The Chairman of Bharti Airtel International Netherlands BV (BAIN) Manoj Kohli, described the deal "as an important step towards the consolidation of tower assets across Africa that will drive industry-wide cost efficiencies and help in growth of telecom services by avoiding duplication of infrastructure." (c) 2014 Ventures Africa. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).
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