MTN to sell its SA cellphone towers to IHS in a R6.4 billion deal

• MTN is selling its more than 5 700 of its cellphone towers in South Africa to NYSE-listed IHS Towers. 
• It will use the R6.4 billion earned from the deal to buy spectrum in next year's auction. 
• MTN will lease the towers from IHS.

MTN is selling, and will lease back, 5 709 of its towers in South Africa, which include some 4 000 "greenfield" and 1 700 rooftop sites. It will also outsource power and related services.

"Proceeds will be reinvested into strategic growth initiatives, such as securing high demand spectrum frequencies, and providing MTN with additional balance sheet flexibility," the company said.

The deal has been described as part of the company's key asset realisation programme and is expected to be finalised in the first quarter of 2022, subject to regulatory approvals.

The company added that it has barter arrangements on approximately 2 000 sites which are not being monetised as part of the current transaction.

MTN has a 29% stake in IHS Towers, which was founded in Nigeria in 2001. IHS is one of the largest independent owners, operators and developers of shared telecommunications infrastructure in the world. It operates towers in Latin America, the Middle East and sub-Saharan Africa.

The company earlier this month listed on the New York Stock Exchange, and has a market value of around $5.2 billion (R80 billion).

Increasingly, mobile operators are using their tower assets to realise value. Last week, Telkom said it expects to list its masts and towers business on the JSE by March next year, as part of its ongoing strategy to unlock value. The business is operated by Telkom's subsidiary company, Swiftnet, and operates 6 225 cellphone masts and towers in South Africa.

This week Vodacom revealed that it was considering a separate listing of its financial services business in South Africa to unlock value.