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Tower Talk: a guide to the week’s major cell site developments

22 Mar 2016

Indian telecoms group Bharti Airtel has entered into a definitive agreement to sell around 1,350 of its towers in Tanzania to American Tower Corporation (ATC) for an undisclosed sum. Under the agreement ATC may also acquire up to 100 additional sites currently in development. Airtel’s Tanzanian unit will be the anchor tenant on the portfolio under a lease with a ten-year initial term. Commenting on the pact, MD and CEO of Bharti Airtel (Africa), Christian de Faria said: ‘We are pleased to strengthen our partnership with American Tower in Africa. The proposed transaction is a continuation of our stated philosophy of divesting passive infrastructure assets and promoting sharing of towers to enhance operational efficiencies that will further the overall growth of telecom services. Airtel remains committed to Tanzania and will continue to invest in its operations and serve customers with world-class services.’ The sale is subject to regulatory approval and is expected to close in H1 2016.

edotco, the passive infrastructure arm of Malaysia’s Axiata, is reportedly mulling entering Pakistan’s tower market, the Star writes, citing an unnamed source. edotco is one of two companies considering a proposed sale-and-leaseback deal featuring up to 9,000 towers from Mobilink, Pakistan’s largest cellco by subscribers. The Malaysian-owned unit has had operations in Pakistan since 2005 and currently operates a 12,000km fibre network in the country. It received a tower licence last year with a view to begin construction of its first 200 sites, and is currently ‘in the process of establishing a subsidiary in Pakistan’, according to an Axiata spokesperson. The other company understood to be in the running for Mobilink’s towers is Dubai-based Towershare, which also has a presence in Pakistan’s tower market. Towershare had previously agreed to purchase 4,500 towers from Warid Pakistan in April 2015, but the deal fell through when Warid was acquired by Mobilink later that year.

Telecom Italia needs more time to make a decision regarding the planned sale of a stake in the tower division Infrastrutture Wireless Italiane (INWIT), board member Tarak Ben Ammar told press last week. A consortium of Spain’s Cellnex Telecom and F2i of Italy entered a binding offer for a 45% stake in the unit, whilst EI Towers entered a rival bid for just under 30% stake in INWIT shortly afterwards.

The planned sale of Indian cellco Reliance Communications’ (RCOM’s) tower assets has been delayed by a disagreement over the valuation of the sites, the Economic Times reports. TPG Capital and Tillman Global Holdings (TGH) had submitted a non-binding offer for the towers in December last year, offering INR215 billion (USD3.2 billion) for the sites, which are currently held through RCOM subsidiary Reliance Infratel. Under the proposed deal, the assets would be transferred from Infratel to a separate special unit that would be wholly owned by TPG and TGH. Following due diligence, however, TPG reportedly entered a lower offer, valuing the portfolio at between INR130 billion and INR150 billion, including its debt. RCOM is understood to have rejected the lower bid. According to the Economic Times’ unnamed sources, TPG found that of the cellco’s roughly 38,000 towers, 10,000 could not accommodate another tenant, either because they are for a single occupant, or because they are fully occupied by RCOM and Reliance Jio Infocomm (RJIL). Based on these findings, TPG estimated that the potential operating profit from the new tower company would be between INR10 billion and INR12 billion annually. Sources close to RCOM have disputed TPG’s estimates, however, saying that the number of fully occupied towers was closer to 2,000 than 10,000. Nevertheless, TPG’s reluctance to accept the higher initial offer has forced TGH to begin looking for another partner with which to purchase the towers, and the firm has reportedly contacted Mubadala, Farallon Capital Management and Carlyle Group.

In a related development, Indian infrastructure firms Reliance Infratel and Ascend Telecom Infrastructure are amongst the list of companies private equity firm New Silk Route Partners (NSR) is considering exiting, as it seeks to return capital to its investors, Live Mint reports. NSR holds a minority stake in Infratel but is the majority owner of Ascend Telecom, which owns more than 4,800 towers, with a tenancy to tower ratio of 1.8 at the end of March 2015.

Kuwait’s Zain Group has received offers from several tower companies regarding the sale it its 7,000 towers in Saudi Arabia and is assessing the bids to create a shortlist of potential buyers. In addition, the operator is also in the process of selling its 1,900 towers in its domestic market. Proceeds from the sales are expected to be used to pay off debt, a source told Reuters. As previously reported by CommsUpdate, rival cellco Etihad Etisalat (Mobily) is also currently selling its tower portfolio in Saudi Arabia.

Finally, US-based fixed wireless ISP Towerstream has announced in that it has closed down HetNets Tower Corporation with immediate effect. HetNets was established as a wholly owned subsidiary of Towerstream in January 2013, offering a shared wireless infrastructure solution, either independently or as a turnkey service.

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