One of the largest mobile telecommunications infrastructure providers in Africa, Europe and the Middle East, IHS Holding Limited (IHS) and the pioneer of tower infrastructure sharing in Africa, Helios Towers Nigeria Limited (HTN), announced Africa’s first mobile infrastructure consolidation. Both companies signed a deal, which will see IHS acquiring HTN’s portfolio of 1,211 diversified tower sites throughout Nigeria. IHS and HTN advised by UBS and Citigroup respectively, did not disclose the value of the deal which is expected to close in Q2 2016.
“Bringing the two companies together means we can keep improving the network for Nigerians by combining the best of both networks,” said Issam Darwish, IHS executive vice-chairman and group chief executive in a statement to Financial Times.
In recent years, telecom tower industries have developed globally as network operators sell their tower portfolios to cut costs and raise cash. Dedicated infrastructure companies such as IHS lease the towers back to the networks, managing the towers more cheaply by operating at larger scale than could a single operator. IHS has grown its business by also purchasing towers from mobile networks including MTN and Etisalat. In 2014, MTN agreed to sell 9,151 mobile towers across Africa valued at $2 billion to IHS in a joint ventures deal in order to drive its cost trimming plan. The company owns a total of 23,300 towers in Nigeria including Cameroon, Ivory Coast, Rwanda and Zambia.
According to the industry observers, this recent consolidation shows that the industry in Africa is maturing and repeats a similar pattern in Europe. However this deal will also increase the number of towers under IHS management and places the provider in a healthier financial position.