MTN yesterday reached an agreement
with IHS Holdings Limited to outsource its telecoms towers otherwise known as
base station. The agreement in principle with IHS was for the transfer and
management of MTN towers comprising up to 9,151.
The transaction is expected to reduce
MTN Nigeria's operating costs, drive network efficiencies and further expand
MTN's voice and data capacity, according to the telecoms company. The business
transaction, according to the telecoms company, was in line with its continued
efforts to further raise service levels for its customers in Nigeria. Under the
terms of the transaction and subject to requisite regulatory approvals, the
9,151 towers would be transferred to a new company, which would be owned
jointly by MTN and HIS.
But IHS would have full operational
control of the underlying business. The new towers company would market
independent infrastructure sharing services to other mobile operators and
internet service providers (ISPs) in the country. The transaction is expected
to close in the fourth quarter of this year. Announcing the new business plan,
Group President and CEO of MTN Group, Sifiso Dabengwa, said: "We are
delighted to have entered into a further transfer transaction with IHS in our
largest African market.
IHS' deep knowledge and considerable
experience in the sector will help drive efficiencies and enhance our network
uptime, allowing us to concentrate on further raising our own service levels,
improving the customer experience and ensuring we remain the number one
operator in Nigeria." This is the ninth tower transaction for IHS and its
fifth with MTN, following other transactions in Cote d'Ivoire, Cameroon, Rwanda
and Zambia that took place in 2012 and 2013.
It is expected that on completion of
the transaction with MTN, IHS would be managing over 20,000 towers in Africa.
Few months ago, Etisalat Nigeria announced the sale of 2,136 of its towers to
IHS Holding Limited as part of a broader strategy to drive improvements in the
quality of its network performance and to accelerate roll out of 2G & 3G
coverage and new services to its customers.
The transaction is also expected to
close later this year. Commenting on the MTN tower transaction, its Chief
Executive Officer, Mr. Michael Ikpoki, said: "The separation of MTN
Nigeria's mobile network towers and operation of the underlying towers business
by IHS reflects a major part of our strategy to optimise network quality and
technological assets towards creating value and driving innovation to meet our
customers' needs now and in the long term." He added: "The trend and
realities in our industry reveal the increased role of cost efficiency and
optimisation of assets in guiding business decisions in order to remain
competitive.
“We will continue to embrace strategies
that enhance our services to our customers while ensuring our long-term
business continuity, without compromising best practice." It was gathered
that as part of the deal, the new towers company has committed more than $500
million of additional investment over four years into tower upgrades and a
maintenance programme to improve quality of service and enhance the customer
experience on the MTN Nigeria network. In addition, further investments will be
made into IHS' centralised Network Operations Centre (NOC) in Nigeria to
optimise operations and increase IHS' market leading network uptimes of over 99
percent. There would also be sustained investments in energy efficiency through
the deployment of advanced generators, batteries and alternative power solutions
to reduce diesel consumption.
IHS anticipates creating a
considerable number of technical and engineering direct and indirect employment
opportunities to be sourced locally in Nigeria. Chief Executive Officer of IHS
Holdings, Issam Darwish said: "This is a significant and transformational
agreement for IHS that doubles the size of our business and confirms our
position as the leading mobile infrastructure company in Africa.”
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