MTN to also ‘shed off’ Tower Business: Sale of Network Towers in Rwanda and Zambia

towersIn the quest to unlock value in its passive infrastructure, MTN has announced the sale of mobile network towers to IHS in Rwanda and Zambia. The announcement revealed that MTN will sell a total of 1,228 mobile network towers to IHS’s subsidiaries in Rwanda and Zambia, comprised of 524 and 704 towers respectively, for undisclosed amounts.

In November Airtel Zambia was shedding off its towers business to a subsidiary called Zambian Towers Limited for a staggering K571 Million. The subsidiary would be formed as a result of the reallocation of towers and civil works; diesel generators; batteries; grid connections; solar equipment; air conditioners; shelter; and security fencing. All this will be done in order to achieve management and operating efficiencies.

On the other hand, the transaction between MTN and IHS will bring the total number of towers in IHS’s portfolio to 10,500 extending its leadership in the African market. Looking at recent developments in the strategic partnerships that MTN has struck up, it appears as though MTN is more likely to hit the ground running come 2014 than its counterparts Airtel Zambia and Zamtel, in this market. This is hinted from Issam Darwish, Group CEO of IHS who commented that, “Our strong and trusted relationship with MTN is important to us and we remain committed to reinforcing their focus on customer service excellence.”

Furthermore, MTN Zambia will become the respective anchor tenant on the towers for an initial term of ten years. Whereas, the services that will be provided to Airtel by Zambian Towers Limited will be on a “non-exclusive” basis and to any other operator that requires tower infrastructure in Zambia.

“We are confident these transactions are a positive step towards freeing up management time to focus on products and services, thereby fulfilling our mission of ‘making our customers’ lives a whole lot brighter,” said Sifiso Dabengwa, President and CEO of MTN Group.

Looking at both pictures presented by MTN and Airtel Zambia, it appears that the pursuit of core business through outsourcing, managed services and strategic alliances are key to achieving operational excellence. We are yet to see the full impact of these industry-wide trends, as it stands, Airtel’s performance has only resulted in loss in customer share, revenue and talent as well as leadership.

Alternatively, according to MTN Chief Marketing Officer Phillip Basiimire, MTN expects to “get a lion’s share of the mobile phone sector” in Zambia. In November, MTN reported that its subscriber base has increased to 3.5 million through the end of September. It is evident that these statistics are steadily gaining on Airtel numbers which has just slightly above four million customers.

With the more successful SIM registration, we expect tables to turn, and the legendary Celtel to be number two (2) in a market that is continuously evolving and presenting those who innovate with new opportunities.

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