MTN will sell as many as 1,876 transmission towers in the west African nation to the new company, TowerCo Ghana, for as much as $428.3 million, the companies said today in Johannesburg stock exchange statements. American Tower will pay as much as $218.5 million for 51 percent of the new company, which it will manage, while MTN will own the rest.
MTN’s Ghanaian division will be “the anchor tenant” on the existing towers, and TowerCo Ghana will build at least 400 more sites for both MTN Ghana and other wireless operators in the country in the next five years, the companies said. The transaction is expected to be completed by early 2011.
Phone companies in Africa are looking to cut costs as increased competition and falling call charges erode profit margins. South Africa’s telecommunications regulator ordered staged reductions in October for termination rates charged by Johannesburg-based competitors MTN and Vodacom Group Ltd. through 2013.
“Infrastructure sharing makes absolute sense for MTN,” Phuthuma Nhleko, the Johannesburg-based company’s chief executive officer, said in the statement. “The Ghanaian market has presented us with an opportunity to partner with a leading independent global tower operator.”
MTN rose as much as 1.56 rand, or 1.2 percent, to 128.39 rand and was up 0.3 percent as of 10:48 a.m. in Johannesburg trading. The stock has risen 7.9 percent this year.
American Tower, which is based in Boston, owns and operates more than 33,000 communications sites in the U.S., Latin America and India. The company said on Nov. 5 that it agreed to buy as many as 3,200 towers from Cell C Ltd., South Africa’s third- largest mobile-phone company, for about $430 million.
The TowerCo venture “reflects the execution of our strategy to invest in selected African markets with strong wireless growth potential and a positive investment climate,” American Tower CEO Jim Taiclet said in today’s statement.
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