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Cape Town - MTN [JSE:MTN] has reached an agreement in principle with specialist tower company IHS Holding to operate MTN’s 9 151 mobile network towers in Nigeria.
The transaction is expected to reduce MTN Nigeria’s operating costs, drive network efficiencies and further expand MTN’s voice and data capacity, the South African mobile giant said in a statement on Thursday.
In terms of the deal, which is subject to regulatory approvals, the towers will be transferred to a new company which will be owned jointly by MTN and IHS, but IHS will have full operational control of the underlying business.
The new towers company will market independent infrastructure sharing services to other mobile operators and Internet Service Providers (ISPs) in Nigeria. The transaction is expected to close in the fourth quarter of 2014.
MTN CEO Sifiso Dabengwa said the deal will allow MTN to concentrate on further raising its own service levels, improving the customer experience and ensuring the mobile service provider remain the number one operator in Nigeria.
He also said the expert knowledge and experience of IHS in the sector will help drive efficiencies and enhance MTN's network up time.
On completion of this transaction, IHS will manage over 20 000 towers in Africa. This is the ninth tower transaction for IHS and its fifth with MTN following the transactions in Cote d’Ivoire, Cameroon, Rwanda and Zambia that took place in 2012 and 2013.
IHS has committed an additional investment of US$500m over four years into tower upgrades and maintenance programme to improve quality of service and enhance the customer experience on the MTN Nigeria network.
MTN, which has operations in nearly two dozen countries in Africa and the Middle East, did not disclose the value of the deal.
Last month the group posted a 9% rise in first-half profit on the back of a robust performance of MTN Nigeria. The group said going forward it expected to benefit from the growing demand for financial services and mobile content in this market.
MTN's share price was up 1.89% at R255.23 by 11:42 on the JSE, compared with a 0.02% rise in the All-share index.
