May 5 (Bloomberg) -- MTN Group Ltd., Africa’s largest phone operator, is planning to sell a stake in its Nigerian mobile tower network, which it values at more than $1 billion, this year.
“There is a bidding process going on, so they’re busy doing a due diligence on us, on our towers, our processes and we’re doing due diligence on them, if they’re the right company,” the Chief Financial Officer of MTN’s Nigerian unit, Andrew Bing, said in an interview in the commercial capital, Lagos today. “During this year that process will then come to a conclusion where there will be a financial bid and a transfer of towers.”
Carriers in Africa are offloading the assets, which cost more to run on much of the continent than in some other parts of the world because of the need for backup generators and batteries to guard against power failures. Towers and the infrastructure that accompanies them can account for more than 60 percent of the expense to build a mobile network, according to data from IHS Holding Ltd., a telecommunications infrastructure company.
MTN, based in Johannesburg, hasn’t decided on the stake it will retain in its Nigerian tower network, which comprises about 11,000 towers, and that will depend on the company it sells them to, said Bing, 49, who will go on sabbatical leave from the company at the end of this month.
“There is the need for more towers and there will be and therefore the towers do become a strategic business going forward, but having a tower to yourself is a costly business,” he said. “The ability to share those costs is what helps drive profitability.”
MTN fell 0.6 percent in Johannesburg today to 212.85 rand, giving it a market value of 398.7 billion rand ($37.9 billion).
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