Safaricom and Telkom poised to ink tower sharing deal

14 Jun 2011

Safaricom, Kenya’s largest cellco in terms of subscribers, and France Telecom-owned Telkom Kenya have announced plans to form a jointly-owned, independently-managed infrastructure company. The deal, which they say represents a ‘regional first’, is expected to be concluded within the next three months. Technical and financial representatives from the two companies are currently working on the finer points of the transaction, which is tipped to be modelled along the lines of an international tower company such as India’s Indus Towers consortium. Safaricom has confirmed that the new company will seek to secure a separate Network Facilities Provider (NFP) licence from industry regulator the Communications Commission of Kenya (CCK) in order to allow it to operate on an ‘Open Access’ model. Going forward, the consortium expects to invite other players on board, either as shareholders or Open Access customers. The company will also seek to lease collocated tower space to any third parties wishing to install wireless communication equipment.

Commenting on the announcement, Safaricom CEO Bob Collymore stated: ‘We have been in talks for a while now assessing the viability of this initiative, which was prompted by the need for the industry to explore improved cost efficiency on infrastructure management, which forms a significant portion of our operational expenses. We are equally cognizant of the environmental impact caused by the continued replication of infrastructure. This initiative will lead to a rationalisation of those duplications in the interest of the public good and overall environmental sustainability’. Telkom Kenya CEO Mickael Ghossein added: ‘The two companies have over 4,000 towers between them and we expect that in addition to the initial equity and debt financing, each partner will contribute some of its existing infrastructure into a common pool. We also expect to consolidate future needs through central planning and deployment so as to take advantage of the economies of scale presented by this deal’.

Kenya, Safaricom, Telkom Kenya