Mobile operator Bharti Airtel has just completed its deal with IHS Holding Limited, a mobile communications infrastructure company, to sell off 1100 towers in Zambia and Rwanda for $200 million under an agreement that allows the contract to be renewed in 10 years. This deal had been announced in 2013.
The sale means that IHS will have full responsibility of the cell towers in Zambia and has promised to introduce some renewable energy solutions to their operations seeing as the power supply here is erratic and unsustainable.
Executive Vice Chairman and group CEO of IHS Issam Darwish said, “Our partnership is designed to further promote network sharing, and deliver higher quality and reliable mobile services”.
Airtel says this sale and lease-back agreement will enable it focus “on its core business and customers, enables it to deleverage through debt reduction and will significantly reduce its ongoing capital expenditure on passive infrastructure”.
However, we know Airtel’s presence in Africa hasn’t been churning out huge profits lately, and this is a way to raise money.
IHS has so far spent over $500 million on buying power systems around Africa while Airtel has raised over $1.3 billion as of July 2015 from the sale of its towers in the various markets it operates in.
Christian de Faria, who is MD and CEO of Airtel Africa, said in a statement that, “The initiative in Zambia will help us deliver a reliable high quality network run by passive infrastructure experts, whilst reducing our capex requirements and operating costs.”
Rival operator MTN also had a similar deal previously with IHS for Rwanda and Zambia, selling off 524 and 704 towers respectively. They outsourced their managed services in order to focus more on their core business as well.