Bharti Airtel (Airtel) on Monday said that it has entered into a definitive agreement with American Tower Corporation (American Tower) through its subsidiary company, Airtel Tanzania, to sell 1,350 of its communications towers in Tanzania.
According to sources, the deal size is said to be approximately $180 million (around ₹1,240 crore). “With this deal, the company has raised around $2 billion (around ₹13,800 crore) in the last two years (since 2014) in nine countries in Africa,” an executive in know of the development told BusinessLine.
The previous deals of selling towers in nine countries include Nigeria (to ATC), Congo, Kenya (Eaton), Uganda (Eaton), Burkina Faso (Eaton), Rwanda and Zambia.
The latest tower sale agreement in Tanzania will allow Airtel to focus on its core business and customers, besides helping de-leverage through debt reduction, and significantly reducing on-going capital expenditure on passive infrastructure, Airtel said.
According to the agreement, American Tower may acquire up to around 100 additional sites currently in development for an additional consideration and Airtel will be the anchor tenant on the portfolio under a lease with a 10-year initial term. “We are pleased to strengthen our partnership with American Tower in Africa. The proposed transaction is a continuation of our stated philosophy of divesting passive infrastructure assets and promoting sharing of towers to enhance operational efficiencies that will further the overall growth of telecom services,” Christian de Faria, Managing Director and Chief Executive Officer (Africa), Bharti Airtel, said. Airtel will continue to invest in its operations and serve customers with world-class services, he said.
“With a young, growing population, tremendous growth potential and a complementary location relative to our existing African operations, we view Tanzania as a highly attractive adjacent market opportunity,” Hal Hess, Executive Vice-President and President, EMEA, of American Tower, said.
The transaction is expected to close during the first half of 2016, subject to customary closing conditions and regulatory approval, Airtel added.