* New joint venture to own and manage MTN towers in Nigeria
* Fifth deal between MTN and Lagos-based IHS
* MTN is Nigeria's No.1 mobile operator with 46 pct market
(Recasts, adds IHS chief executive quotes)
By Matt Smith
DUBAI, Sept 4 South Africa's MTN has
agreed to sell 9,151 mobile towers in Nigeria to a new joint
venture with specialist tower company IHS, which MTN said will
cut its costs and boost its call and data capacity in Africa's
most populous country.
The latest IHS tie-up with MTN, Nigeria's top mobile
operator with a 46 percent share of subscribers, is the fifth
between the companies following transactions in Ivory Coast,
Cameroon, Rwanda and Zambia in the past two years.
IHS will take operational control of the jointly owned
company in deal due to close in the fourth quarter, subject to
regulatory approvals, Lagos-based IHS said on Thursday.
The towers specialist did not reveal the deal's value, but
an agreement in August to buy and lease back 2,136 towers from
Etisalat Nigeria, an affiliate of Abu Dhabi's Etisalat
, was said by banking sources to be priced at about
$400 million. Based on roughly the same valuation, the new MTN
deal would be worth about $1.8 billion.
"There's massive growth potential in Nigeria," IHS Chief
Executive Issam Darwish told Reuters.
"Broadband will be the most important factor. Part of the
reason mobile operators are selling their towers is to free up
capital and resources to concentrate on this opportunity."
Nigeria has about 125 million mobile subscribers, while
mobile Internet subscriptions total around 66 million, according
to the industry regulator. Nigeria's population is 177 million,
the CIA Factbook estimates.
Darwish said the relatively slow take-up of mobile Internet
in Nigeria, and Africa in general, is because of the high cost
of smartphones and limited frequencies for operators.
But some handsets now cost less than $100 and prices are
likely to fall further, while regulators are freeing up spectrum
better suited to mobile broadband, Darwish said, which should
lead to an internet boom.
"We're very bullish, while there is still also growth in
voice," Darwish said.
The MTN-IHS deal will "reduce MTN Nigeria's operating costs,
drive network efficiencies and further expand MTN's voice and
data capacity," MTN said in a separate statement
Building and maintaining mobile communications towers in
Africa is typically more expensive than in other regions because
of security costs and electricity shortages, while revenue per
user is often lower.
That has prompted many operators to sell or lease towers to
specialist companies, which can reduce building and maintenance
costs by hosting multiple tenants - mobile operators and
Internet providers - on the same towers.
It also allows operators to focus on marketing and customer
service, which become more important to rival operators as
differences in network quality diminish.
The new joint venture will invest more than $500 million
over four years to upgrade the MTN towers, boost maintenance and
improve service quality, the IHS statement added.
On completion, IHS will manage more than 20,000 towers in
Africa. The company aims to manage more than 25,000 towers by
the end of 2015, it added.
Darwish said IHS would build the bulk of these extra towers,
though small-scale acquisitions are also possible.
(Editing by David French and David Goodman)