MTN
has reached an agreement in principle with IHS Holding Limited (IHS) for the
transfer of its towers business, comprising up to 9,151 of MTN’s mobile network
towers in Nigeria, IHS said in a statement on Thursday.
The
transaction is expected to reduce MTN Nigeria’s operating costs, drive network
efficiencies and further expand MTN’s voice and data capacity.
This
is the ninth tower transaction for IHS and its fifth with MTN following the
transactions in Cote d’Ivoire, Cameroon, Rwanda and Zambia that took place in
2012 and 2013. On completion of this transaction, IHS will manage over 20,000
towers in Africa.
Under
the terms of the transaction and subject to requisite regulatory approvals,
the
towers will be transferred to a new company which will be owned jointly by MTN
and IHS. IHS will have full operational control of the underlying business. The
new towers company will market independent infrastructure sharing services to
other mobile operators and Internet Service Providers (ISPs) in Nigeria. The
transaction is expected to close in Q4 2014.
Sifiso
Dabengwa, Group President and CEO of MTN Group, said: “We are delighted to have
entered into a further transfer transaction with IHS, in our largest African
market. IHS’ deep knowledge and considerable experience in the sector will help
drive efficiencies and enhance our network uptime, allowing us to concentrate
on further raising our own service levels, improving the customer experience
and ensuring we remain the number one operator in Nigeria.”
Optimising network quality
Commenting
on the transaction, Michael Ikpoki, MTN Nigeria CEO said: “The separation of
MTN Nigeria’s mobile network towers and operation of the underlying towers
business by IHS reflects a major part of our strategy to optimise network
quality and technological assets towards creating value and driving innovation
to meet our customers’ needs now and in the long term. Indeed, the trends and
realities in our industry reveal the increased role of cost efficiency and
optimisation of assets in guiding business decisions in order to remain
competitive. We will continue to embrace strategies that enhance our services
to our customers
while
ensuring our long-term business continuity, without compromising best
practice.”
As
part of the deal, the new towers company has committed more than $500m of
additional investment over four years into tower upgrades and a maintenance
programme to improve quality of service and enhance the customer experience on
the MTN Nigeria network. In addition, further investments will be made into
IHS’ centralised Network Operations Centre (NOC) in Nigeria to optimise
operations and increase IHS’ market leading network uptimes of over 99%.
There
will also be sustained investments in energy efficiency through the deployment
of advanced generators, batteries and alternative power solutions to reduce
diesel consumption. IHS anticipates creating a considerable number of technical
and engineering direct and indirect employment opportunities to be sourced
locally in Nigeria.
Businessday
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