IHS enters Africa’s most industrialised economy
IHS Towers has bought 5,701 towers in South Africa from mobile operator MTN South Africa for R6.4 billion rand (€385 million).
Under the agreement, IHS Towers will provide power management services (PMS) to MTN SA on nearly 13,000 sites, including the acquisition portfolio, across South Africa. The acquired assets and provision of power services are expected to deliver R3bn (€181 or $192 million) and (€79 million or $85 million) respectively, in the first full year of operations. This transaction has been approved by the South African Competition Commission.
Ralph Mupita, MTN Group President and CEO, explained the rationale: “We built the best network in the country and IHS [has] the necessary experience and expertise to maintain and enhance this critical part of the business. This international partnership also brings foreign investment into the market to create greater competition.”
The PMS component of the transaction is aligned to IHS Towers’ existing service offering in other African markets. The service will be delivered to the acquired sites, as well as to other third-party sites on which MTN SA is present. This service will primarily involve power systems and security at sites.
IHS Towers will own 70% of the South African Towers business with the remaining 30% to be owned by a broad-based black economic empowerment (B-BBEE) consortium, a programme provides a legislative framework for the transformation of South Africa’s economy. The acquisition gives IHS a presence in eleven emerging markets with seven in Africa, four in Latin America and the Middle East, with a global tower count of nearly 39,000 towers.
IHS was founded in Africa and the region continues to be a key anchor for the company, according to Sam Darwish, IHS Towers Chairman and CEO. “Through this transaction, IHS has now entered the most industrialised economy in Africa as South Africa’s largest independent tower operator. MTN Group have been a long-term partner of IHS and we will expand that collaboration and facilitate mobile connectivity to meet South Africa’s increasingly sophisticated data demands and expedite the roll-out of new technologies.”